There’s a lot to unpack in our first CEO Confidence Survey, which you can read about here. If asked, I would say the headline is that Arkansas CEOs are feeling good, with caveats.
First, some background on the survey itself, and then some big-picture takeaways.
Arkansas Business Publisher Mitch Bettis and I have discussed doing a CEO survey since 2013, aiming to give local decision-makers a regular sense of Arkansas business conditions. After a decade of exploring different ways to do this, we think we’ve hit on a good approach that is A) repeatable, B) accurate and C) relevant to CEO concerns. Even better, the first-party contacts we have for key Arkansas executives across an array of industries allow us easy access to the very people whose expert assessments we seek.
And now, some takeaways:
► Workforce and rising costs are still the top pain points for CEOs. Not long after I became editor in August 2021, Online Editor Scott Carroll and I conducted an informal email poll of Arkansas business decision-makers and found three top concerns: workforce, supply chain problems and inflation.
Fast-forward to July 2023, and 76% of the CEOs we surveyed continued to put difficulty hiring and retaining workers and navigating high prices as their primary worries, while supply chain concerns — not uncommon among our cohort — have diminished.
► High interest rates are a drag. While the Federal Reserve is showing signs of ending its streak of interest rate hikes, economists expect this period of continued high rates to last a while. And CEOs we heard from said that will keep them from doing certain deals, including bigger real estate and construction projects, until money gets cheaper. That ripples throughout a business, keeping a company from hiring more people or purchasing major equipment.
This of course is what the Fed’s strategy aims to do — cool an overheated economy dogged by inflation. But that doesn’t make the practical effects any less painful.
► But CEOs feel very good about their businesses and their prospects. Having said all that, CEOs seem surprisingly upbeat about how their businesses are doing and their prospects for the next 12 months.
The survey shows 45% of CEOs expecting a profit increase over the next 12 months and 55% expecting revenue to rise during the same period. That seems remarkable to me, having written a column almost one year ago about “what to do as recession looms.” That was in response to a growing consensus that a downturn was imminent. A projection by a pair of Bloomberg economists at the time put their 12-month estimate of a downturn by October 2023 at 100%.
The recession, it seems, has been postponed.