NEW YORK, April 8 (UPI) -- A poll of chief executives showed that confidence in the U.S. economy declined in the first quarter of 2003, according business research group The Conference Board.
The Conference Board's Measure of Business Confidence, which had rebounded to 58 in the final quarter of 2002, fell to 53 in the first quarter of 2003. Anything over 50 points still indicates a generally positive outlook, while anything under 50 indicates a negative viewpoint.
The survey was conducted during the build-up of the war with Iraq.
"War, threats of terrorism, high energy costs, and weak economic news have contributed to the decline in CEOs' confidence," said Lynn Franco, director of The Conference Board's Consumer Research Center. "Although their short-term outlook signals economic growth in the months ahead, their cautious hiring plans suggest this growth will be moderate."
CEO's overall assessment of current conditions declined in the first quarter of 2003, falling to 40 from 52. A rising percentage of CEOs say that current economic conditions have worsened --- 39 percent versus 27 percent in the final quarter of 2002. In assessing their own industries, about 43 percent say business conditions have eroded, up from 31 percent in the prior survey.
Expectations for the next six months are mixed. While business leaders' outlook for the overall economy is less optimistic than last quarter -- the measure declined to 60 from 63 --- CEOs remain generally upbeat. Industry expectations improved, with the measure edging up to 60 from 59.
Less than 16 percent of business executives look for employment levels to increase in their industry, down from 28 percent last year. Those anticipating declines rose to nearly 47 percent from about 29 percent.
Business leaders cite health care costs as the major obstacle to hiring new workers. Regulation and litigation costs, along with wage and salary costs, are of less concern. The cost of fringe benefits also remains of minimal concern to business executives when hiring new workers.
