New Survey Find U.S. CEO Confidence In Negative Territory as Inflation and Economic Fears Mount.

Confidence among America's top business leaders has turned negative as rising energy costs, inflation, and geopolitical uncertainty fuel concerns about the U.S. economy, according to a new survey.

The Conference Board's Measure of CEO Confidence fell to 46 in the latest quarter, down from 52 three months earlier. A reading below 50 indicates that more executives view economic conditions negatively than positively.

The findings come just weeks before the November midterm elections, when the economy, inflation and the cost of living are expected to be central issues for voters. The survey, conducted by the nonprofit Conference Board in collaboration with the Business Council, questioned 131 Fortune 500 chief executives between September 21 and October 5.

It assessed their views of current economic conditions and expectations for the broader economy and their industries over the next six months. The results revealed a sharp increase in pessimism. Some 41% of CEOs expect economic conditions to worsen over the coming six months, more than double the 19% who expressed that view in the previous quarter.

Rising energy prices, particularly diesel, have emerged as a major concern for businesses already struggling with higher operating expenses. Diesel is essential for transportation, agriculture and industrial production, making price increases especially consequential for companies that depend on complex supply chains.

"All these inflationary shocks, one after the other, is weighing down on the confidence of both CEOs and consumers," Dana Peterson, chief economist at the Conference Board, told Axios.

The deterioration in executive confidence mirrors growing dissatisfaction among American consumers. The Conference Board's consumer confidence readings have fallen below levels recorded during the COVID-19 pandemic.

The latest survey also highlights emerging concerns beyond traditional economic indicators.
Executives reported heightened anxiety about cybersecurity, artificial intelligence and geopolitical developments compared with three months earlier. Cybersecurity was particularly prominent, with 94% of respondents identifying cyber threats among their leading AI-related concerns.

However, the pessimistic outlook has not yet resulted in a widespread retreat from corporate investment. Despite their worsening assessment of economic conditions, most CEOs have largely maintained their spending plans, suggesting that businesses are preparing for slower growth without abandoning longer-term expansion strategies.

A separate survey released Thursday by professional services firm KPMG offered a more optimistic picture of corporate hiring intentions. According to that study, 89% of U.S. CEOs expect to increase their workforce over the next three years as artificial intelligence creates new business opportunities.

"As we put more AI into our processes and platforms, the capacity opens up," KPMG CEO Tim Walsh told Axios. Walsh said executives believe that incorporating AI into their operations could allow businesses to expand, ultimately supporting additional hiring rather than simply replacing workers.