All component indices fell in July as well except for the Employment Confidence Index, which rose by 2 points. Even though this index was in the black, a high level of c-suite pessimism persists. Over half (52 percent) of CEOs polled say they expect employment to decrease over the next quarter.
Reflecting on the economy and the job market, Mark Renkert, chairman of Fairhaven Crowne, says: "As providers of Executive Search our clients are asking us to find seasoned executives who know how to cut payrolls, spin off divisions, and outsource services. No one is seeking executives who know how to grow sales." They are looking for people who know how to make do with soft sales and terminate expensive personnel--that is those with 15-plus years of experience who are operations oriented and not part of the revenue generating process."
The Investment Confidence Index, which measures CEO confidence in domestic investment conditions, hit a new historic low in July. CEOs expect the economy to gradually decline rather than gradually grow by a margin of 3:2. Furthermore, five percent of respondents expect rapid decline, while none expect rapid growth.
"Our respondents have been presciently aware of the difficulties facing the American economy," says Edward M. Kopko, CEO and publisher of Chief Executive Magazine. "They have been stressing over and over again the continued need for economic dynamism, because healthy companies create jobs."