The Conference Board Measure of CEO Confidence in collaboration with The Business Council stands at 43 to start 2023, up from 32 in the final quarter of 2022. The Measure's improvement early in Q1 2023 represents an uptick from the extreme weakness seen last year, which brought it to lows comparable to the depths of the COVID-19 recession in 2020. However, it is still below a reading of 50, which suggests CEOs remain cautious at the start of 2023.  (A reading below 50 reflects more negative than positive responses.) A total of 142 CEOs participated in the Q1 survey, which was fielded between January 17 through 30. 

In the survey, 93 percent of CEOs still report they are preparing for a US recession over the next 12-18 months (compared to 98 percent in the Q4 2022 survey). They also still expect that the recession will be brief and shallow with limited global spillover (86%). However, the percentage who are preparing for a deep US recession dropped from 13 percent in Q4 2022 to 7 percent in Q1 2023, signaling that some CEOs are somewhat less pessimistic. Nonetheless, 55 percent of CEOs believe that a global recession is the greatest challenge for their companies.

"CEO confidence rose markedly between Q4 2022 and Q1 2023, but continued to signal a degree of pessimism among CEOs," said Dana M. Peterson, Chief Economist of The Conference Board. "CEOs' assessments of both current and expected economic conditions picked up from 2022's extreme lows, but still are far from 2021's peak. Roughly 6 in 10 CEOs still say economic conditions are worse than they were six months ago. However, the proportion of CEOs expecting economic conditions to worsen over the next six months declined sharply from 74% last quarter to 48% in Q1, with just 33% now expecting conditions in their own industry to deteriorate."   

"CEOs continue to see dichotomies in economic conditions and what it means for the future," said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Trustee of The Conference Board. "While CEOs are still girding for a recession in 2023, they continue to experience a tight labor market. Notably, 81% of CEOs plan wage increases of three percent or more, and most expect to either expand (37%) or maintain (44%) the sizes of their payroll headcounts in the next 12 months. Cost pressures remain high, but there has been some easing in transportation and energy costs. Regarding managing elevated input prices, nearly 6 in 10 say they are passing higher costs on to consumers. Generally, going forward, CEOs will monitor consumer price inflation and GDP as gauges of the health of the US economy in 2023."

Current Conditions 
CEOs' assessment of general economic conditions improved at the start of Q1:

• About 16% of CEOs reported economic conditions were better compared to six months ago, up from 5% in Q4.

• 55% said conditions were worse, down from 81%.

CEOs were more optimistic about conditions in their own industries to start Q1:

• 23% of CEOs reported that conditions in their industries were better compared to six months ago, up from 15%.

• 43% said conditions in their own industries were worse, down from 52%.

Future Conditions 
CEOs' expectations about the short-term economic outlook improved to start Q1:

• 18% of CEOs said they expected economic conditions to improve over the next six months, up from 5% in Q4.

• 48% expected conditions to worsen, down from 73%.

CEOs' expectations regarding short-term prospects in their own industries also improved to start Q1:

• 26% of CEOs expected conditions in their own industry to improve over the next six months, up from 19%.

• 33% expect conditions to worsen, down from 54%.

Employment, Recruiting, Wages, and Capital Spending

• Employment: 37% of CEOs expect to expand their workforce over the next 12 months, down from 44% in Q4.

• Hiring Qualified People: 57% of CEOs report some problems attracting qualified workers, somewhat improved compared to 68% in Q4. Of those, 17% report difficulties that cut across the organization, rather than concentrated in a few key areas—down from 39% in Q4.

• Wages: 81% of CEOs expect to increase wages by 3% or more over the next year, down slightly from 85% in Q4.

• Capital Spending: 14% of CEOs expect their capital budgets to increase by more than 10 percent over the next year, versus 10% last quarter. 

US Recession Outlook:
Majority of CEOs are preparing for a brief and shallow US recession, with limited global spillover, over the next 12-18 months.

Input Costs:
Majority of CEOs are managing input costs by passing them onto customers while a close second action was cutting operating, research, and/or general overhead.

Easing in Cost Pressures:
Elevated wage pressures persist, but there are signs of easing in costs for transportation and energy.

Managing Labor Costs:
A slight majority of CEOs said they are still increasing wages across the board but are managing rising labor costs through other means; almost half said they are reducing hiring plans, including selective hiring freezes.

Top Watched Gauges of the US Economy:
CEOs said they will be watching consumer inflation and GDP as important gauges of the health of the US economy in 2023.

Biggest Challenge in 2023:
Majority of CEOs see global recession as the biggest challenge facing their company in 2023.

Source: CEO Confidence Survey, First Quarter 2023/The Conference Board. 
The Q1 survey was fielded during 1/17 through 1/30.