Confidence improves as CEOs wait for takeoff [Q4 2023 Vistage CEO Index]

Waiting to take off can be one of the most frustrating aspects of air travel. Sitting on the tarmac as you slowly inch forward in a queue of planes can be compared to the tension CEOs feel waiting for the next growth cycle to take off. The Q4 Vistage CEO Confidence Index rose 6 points to reach 82.0 — the fifth time in six quarters — and while optimism is improving, the historical lows of economic confidence show that takeoff is still delayed.

Despite healthy GDP in 2023, CEOs’ concerns regarding the current and future economy stay within ranges not seen since the waning days of the Great Recession in 2008. Compared to Q4 2022, both expectations for the next 12 months and a review of last year are well above the lows hit in Q2 2022, yet still well below the norm established during the rising economic tide of the 2010s.

CEOs are challenged to manage growth through the slow period forecasted in 2024. As Brian Burns, Co-Founder of Cutting Edge Countertops shared in the survey, one of his biggest challenges is “managing through a changing economy. As markets soften, marketing and sales must change gears and have the mindset of gaining market share. It’s more important than ever for the operations side of the business to execute and help win business.”

Download the Q4 Vistage CEO Confidence Index report to learn more about CEO sentiment and plans for 2024.

Expert Perspective: ITR Economics

Our trusted partner, ITR Economics, shared that their forecast for 2024 continues to call for a general macroeconomic recession. Jackie Greene, VP of Economics for ITR, conducted a rate-of-change analysis of the Vistage CEO Confidence Index that showed a rising trend. However, she cautioned that “The overall rise is a function of the value of the Index one year ago. As a result, the boost is not based on future growth, but an adjustment from the low of the past year.”

Watch the conversation to learn more about how the Vistage CEO Confidence Index aligns with ITR Economics’ forecasts.

Key takeaways include:

• Be diligent about factoring in how to best manage finances as well as customers’ expectations in this new reality.
• Protect your profit margins; avoid getting caught competing on price alone. Hone in on your competitive advantages, promoting what you do better than your competitors.
• Consider employment needs in the context of the recession in 2024 and the rise in 2025. Align the timing of your hiring cycle with growth projections.

CEO Decisions and Investments

From our analysis of responses to open-ended questions about decisions, investments, challenges and opportunities that were captured from 1,363 CEOs, we have distilled the top areas of focus for 2024. Learn more about these areas in our upcoming webinar, CEO Projections for 2024.

• Talent: Hiring and recruiting continue to be the top decisions that CEOs are facing. While pressure on hiring has relented, operational impacts remain with 48% of CEOs reporting they cannot operate at full capacity due to challenges in hiring.
• Growth: Decisions about growth and expansion are also top of mind. Leaning into the economic gap, CEOs are looking at growing into new markets and geographies with new or enhanced products. Their decisions are also focused on rethinking marketing tactics and powering up sales growth to get closer to customers. As prior surveys have revealed, acquisitions are being planned by 27% of CEOs as a path to growth.
• Operational efficiency: Driving efficiency and productivity were also frequently mentioned as top decisions and backed up by investments in technology and automation. Streamlining processes and optimizing resources is critical with a focus on financial discipline.

The new status quo has been set as the twilight of the aftermath economy fades into the proverbial new normal. With altered yet stable rates for inflation, interest and unemployment, ambitious CEOs are making critical decisions and investments to bridge the gap and become better positioned for the upswing.

Read the complete analysis in our Q4 2023 Vistage CEO Confidence Index report, and examine trends in our new data center over time.

For 20 years, the Vistage CEO Confidence Index has been the definitive voice of high-performing, high-integrity small and midsize business leaders. It’s provided the world-class insights that chief decision-makers need in service to our vision of being the most trusted resource to SMBs.

The Q1 2024 Vistage CEO Confidence Index survey will be in the field March 4-18, 2024, to capture CEOs’ sentiment on talent management, specifically their strategies for succession planning and managing their talent pipeline.

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