CEOs are less confident about the U.S. economy than they were earlier this year - although their overall confidence level remains positive, and two-thirds expect profits to increase in the next 12 months, according to a Conference Board survey of about 100 top executives in a wide range of industries.
The CEO confidence measure fell to 55 in the second quarter from 62 in the first quarter, the survey found. "A reading of more than 50 points reflects more positive than negative responses," according to an accompanying statement.
Some 68% expect profits to increase during the next 12 months, the survey found. CEOs in the non-durable goods industry were the most optimistic, with 75% expecting profits to increase. In the durable goods industry, 71% expect an increase; in the service industry, 61% expect higher profits.
Of the CEOs who expect profits to rise, "51% cite an increase in market demand growth as the main source of improvement, 30% cite cost reductions, 16% cite price increases, and the remaining 4% believe technology will drive profits up," according to the survey.
In general, economic conditions have improved, 44% of CEOs surveyed said, down from 59% last quarter; and in their own industries, 38% believe conditions are better, down from 57% last quarter. Thirty-seven percent of CEOs expect economic conditions to improve in the coming months, down from 43% last quarter; and in their own industries, 35% expect improvement, down from 47% last quarter.
"While overall confidence remains relatively positive, the latest reading reflects growing concerns that U.S. economic growth may be slowing down," Lynn Franco, director of The Conference Board's Consumer Research Center, said in a statement. "And, while the outlook for corporate profits remains optimistic, rising interest rates and oil prices may curb business leaders' projections."