CEO confidence just took a dive, largely thanks to inflation
CEO confidence took a dive in the second quarter, according to a survey out this morning by The Conference Board in collaboration with The Business Council. (CEO Daily got an exclusive early look.) The measure now stands at 42, down from 57 in the first quarter—the lowest reading since the first quarter of 2020. A reading below 50 reflects more negative than positive responses.
Inflation was the big driver of the drop. A majority of CEOs now see a scenario where inflation moderates, but only after interest rate hikes lead to a mild recession. Former TIAA CEO Roger Ferguson, who is a trustee of The Conference Board and vice chair of The Business Council, said the survey shows businesses “are combatting a tight labor market by increasing wages across the board. On top of that, companies are grappling with higher input costs, which 54% of CEOs said they are passing along to their customers. This may contribute to cooling in consumer spending heading into summer.”
A few other data points:
- 80% of the CEOs reported some problems attracting qualified workers, down only slightly from 83% in the first quarter.
- 63% of the CEOs still expect to grow their workforce, down only slightly from 66% in the first quarter.
- 38% of CEOs expect to increase capital budgets in the year ahead, down from 48% in the first quarter.
You can read more from the survey here. And on this week’s Leadership Next podcast, learn how one health care CEO managed to achieve overall mortality rates in COVID-19 patients that were 66% better than comparable populations. There’s a lesson there for the rest of the health care industry. Listen on Apple or Spotify.
The Justice Department has sued casino mogul Steve Wynn over his alleged lobbying of former President Donald Trump in 2017, on behalf of the Chinese government. Beijing wanted the extradition of exiled critic Guo Wengui, and Wynn allegedly went to bat for them in an attempt to protect his Macau operations. Fortune
After Russia's invasion of Ukraine, Finland and Sweden have together formally submitted their applications for NATO membership. But their accession is seriously threatened by Turkey, which claims the countries—Sweden in particular—are backing and/or tolerating Kurdish terrorists. Fortune
Beijing might be hinting that it's preparing to ease its crackdown on domestic tech firms, but investors aren't so sure, and would like to see some evidence before piling back into the sector. (Bonus read: China is now diverting anti-poverty funds to COVID testing, which is not a great sign.) Fortune
The U.K. inched closer to a trade war with the EU yesterday, as Foreign Secretary Liz Truss warned the country would introduce legislation to partially alter the deal the two sides struck on the issue of customs checks. Unilaterally revising the Northern Ireland protocol would be a breach of international law, and the EU has threatened that the U.K. risks losing its free-trade agreements with its much larger neighbor if it makes good on its threat. Guardian
AROUND THE WATERCOOLER
Fortune's Vivienne Walt went to the Carpathian mountains of south-west Ukraine to meet the army's "IT unit"—a bunch of tech engineers, executives and entrepreneurs who are now supporting those on the frontline. Fortune
What to do about those gigantic patches of floating plastic debris in our oceans? A French NGO called Gaia First is working on a vessel that can permanently stay out at sea, converting the trash into a renewable fuel; either hydrogen or ammonia. The boat would be powered by the fuel it produces. Fortune
There's long been a ban on Antarctic mining, but Russia is eyeing massive oil and gas reserves. State-owned prospecting company Rosgeo claims its Antarctic surveys are "exclusively scientific" and in "no way engaged in the exploration and exploitation of Antarctic mineral resources"—so why is it publicly salivating about making it "possible to substantially clarify our expectations of the oil-and-as bearing prospects of the Antarctic Shelf Seas"? Daily Maverick
Jamie Dimon and other New York City business leaders should take the subway to work to show that the city is "back", Mayor Eric Adams has suggested: "We’re going to get everyone on the train. [Dimon] understands the need of getting his people back and leading from the front." A no-comment from JPMorgan. Financial Times
This edition of CEO Daily was edited by David Meyer.
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