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Chief Executive Officer Optimism Rebounds in August Poll

August 9, 2023

Chief Executive
Melanie C. Nolen

Besides Fitch’s downgrade of the U.S. government debt rating last week, not much has changed in the business landscape since we last polled CEOs in early July, when the Fed announced its 4th rate hike this year. Yet, when we asked CEOs on August 1-2 to rate what they believe business conditions will look like 12 months from now, their outlook was more positive than it had been just one month prior.

After retracting 6 percent in July, Chief Executive’s CEO Confidence Index reading for August shows a 3 percent improvement in CEOs’ one-year forecasts for business, compared to July.

At 6.4 (measured on a 10-point scale where 10 is Excellent and 1 is Poor), our leading indicator is at its second highest level of the year.

CEOs say that despite the latest quarter-point rate hike and the idea that the Fed may not be done tightening just yet, they see continuous improvement in the overall economy and in their ability to drive growth.

And it’s not just when looking at the future that CEOs see a better landscape. Their rating of current business conditions is also up in August, at 6.2 from 5.9 in July.

RELATED: Read the 2023 State of the Region Report


Forecast of Business Conditions 12 Months From Now graph


“Optimism that we will start to see a recovery in the economy…neutralizes the recession narrative,” said Tobin Trevarthen, the CEO of Spatial Shift. He believes that by this time next year, “all the belt-tightening will have happened and the need to stay in front of AI impact will drive decisions to advance the business.”

The idea that the U.S. will escape a recession is driving higher confidence ratings this month, but most of the 181 CEOs surveyed said there are nevertheless signs of a slowdown on the horizon.

“The backlog is drying up,” said one of the CEOs polled. “Our sales team is pessimistic.”

“There’s some weakness in Q2 bookings, so expecting a slower 2H of 2023 that could last a few quarters,” said another.

Even nonprofit organizations report signs of slowing. “Some revenue channels continue to be strong while others are beginning to show cracks,” said the CEO of Northwest Association for Blind Athletes.

The sentiment that growth will slow was widely shared by the CEOs we surveyed this month. Overall, the proportion of those who expect things to continue improving over the coming year dropped to 39 percent in August, from 44 percent in July. Meanwhile, the proportion expecting things to deteriorate increased to 32 percent from 27 percent.

And despite having avoided a recession—for most sectors—growing inventories, the increasing difficulty to raise prices, the high cost of borrowing and the upcoming election year are all listed as concerns for the months ahead.

Still, July had seen a sharp rise in improving forecasts (+59 percent from prior month), and the 12 percent decrease in August, though important, only slightly impacts the overall figure. At 39 percent, the proportion of CEOs who forecast improving conditions by August 2024 remains well above the proportion that had been recorded just one month before, in June (28 percent).


CEO Forecast for Business 123 Months From Now graph

The Labor Challenge

Labor remains a significant concern for many of the CEOs we survey month after month. And according to our August data, the situation doesn’t seem to be improving.

Three-quarters of the CEOs polled in August said that hiring challenges haven’t eased since last year—despite the Fed’s best efforts—and 35 percent of those say it’s actually gotten more difficult. Our sister publication, StrategicCHRO360, asked CHROs the same question last week, and the numbers matched: 73 percent said hiring hadn’t eased, and 39 percent said it had in fact gotten more difficult in the past year.


When hiring today, how are you finding your ability to get the people you want at the cost you want, versus a year ago graph

If there is a new expectation that labor availability will increase in the quarters ahead—see recent reports of a softening market—there is still the issue of labor cost. Once again, three-quarters (77 percent) of CEOs say the pay increases requested by employees remain large—and 33 percent say those numbers are in fact still rising.

When we asked CHROs, the response was even more pronounced: 90 percent said the pay increases remain large—and 56 percent said the increases requested by employees are higher than last year.


With your existing employees, how would you assess their requests--in general-- for pay increases versus a year ago?

The Year Ahead

When asked about their respective companies’ forecasts, CEOs’ outlook for profits, revenues, capex and hiring remains stable since July.

Sixty-five percent anticipate increased profitability by this time next year (vs. 65 percent in July), 75 percent expect higher revenues (vs. 76 percent), and 45 percent are planning to increase capital expenditures and hiring (vs. 45 and 47 percent the month prior).


Proportion of CEOS Projecting Increases in Profits and Revenues Over the Next 12 Months graph

Proportion of CEOS Projecting Increases in Capital Expenditures Over the Next 12 Months graph

Proportion of CEOS Projecting Increases in Hiring Over the Next 12 Months graph

These proportions are among the highest observed so far in 2023, though the majority of CEOs said their ability to increase prices for their products and services is getting more difficult, which could impact the bottom line down the road.


How are you finding your ability to raise prices for your goods or services versus a year ago at this time?


Given all of the above, CEOs say they are focusing, in the current environment, on developing or deploying new products/services (28 percent) and accelerating automation and technology adoption (24 percent). Hiring new talent and raising prices remain well below on the list of priorities.


Given the current market and economy, which of the following do you see as the MOST promising for your business for the next 12 months graph


About the CEO Confidence Index

The CEO Confidence Index is America’s largest monthly survey of chief executives. Each month, Chief Executive surveys CEOs across America, at organizations of all types and sizes, to compile our CEO Confidence Index data. The Index tracks confidence in current and future business environments, based on CEOs’ observations of various economic and business components. For additional information about the Index and prior months data, visit