CEOs Practice Cautious Optimism, Business Group Says

ByPat Panchak The Conference Board's Measure of Business Confidence rebounded in the last quarter of 2002, but shows that chief executives of manufacturing companies are becoming less confident about the future of their industries than their service industry colleagues. The overall confidence rating, which had declined to 54 in the third quarter of 2002 rebounded to 58 in the final quarter. (A reading of more than 50 points reflects more positive than negative responses.) CEO's expectations for the economy in the next six months also advanced, rising to 63, from 60 in the third quarter. The findings suggest a level of cautious optimism, says Lynn Franco, director of The Conference Board's Consumer Research Center. "But the level of optimism does not suggest a dramatic acceleration in economic growth during the first half of 2003." CEO expectations for their own industries also were more upbeat overall, with The Conference Board measure improving to 59 from 58. A closer look, however, reveals that manufacturing executives' viewed their industries' future a bit more pessimistically. The manufacturers measure dropped to 50 from 64 in the second quarter, while the service industry's measure dropped to 59 from 64 during the same time frame. Food, Textiles and Apparel executives were the most pessimistic, with a measure of 33.