The Young Presidents' Organization Global Pulse Index dropped 3.4 points in the third quarter to 57.7 as confidence declined among the more than 1,000 U.S. CEOs participating in the survey.
This marks the second straight decline and the first time the U.S. index has dropped in consecutive quarters since the index started in July 2009. The index is based on 50, meaning a reading of 57.7 reveals CEOs are moderately confident the economy will grow over the next 12 months, but this confidence has lessened since July 2010.
The index also finds CEOs believe business conditions have worsened since only six months ago. Twenty-seven percent of respondents say the economy had improved, a drop from 46 percent in the July survey. Another 36 percent of respondents say conditions worsened, compared to 17 percent of respondents from the July index.
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Over the next six months, the economy is expected to struggle, according to the index. Thirty percent of respondents say they believe the economy will improve during the next six months while 45 percent of respondents believed so three months ago. Conversely, 25 percent of respondents say the economy will worsen during the next six months, compared to 12 percent of respondents who said that last quarter.
Despite this, CEOs are optimistic about sales. Although the YPO Sales Confidence Index for the United States fell 2.6 points to 64.8, that is still considered a robust level, as the highest level was 68.9 in the first quarter of this year. The index's current level suggests CEOs are fairly confident about sales growth over the next 12 months, even though they hold a more subdued stance for the nearer term.
Employment outlook remains nearly unchanged, with a decline by less than half a point to 58.3, showing that CEOs are likely to continue hiring workers at a modest pace. The investment outlook also slightly fell. The YPO Fixed Investment Confidence Index for the United States dropped only one point to 58.2, following a similar slight drop in the second quarter after the index peaked at 61.3 in January of 2011.
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