The Conference Board Measure of CEO Confidence for the second quarter declined slightly after improving sharply at the beginning of the year, with CEOs preparing for a brief and shallow recession in the US.

The measure fell to a reading of 42 this quarter, down from 43 in the first quarter of the year, suggesting that CEOs continue to hold pessimistic views about the economic situation as readings below 50 reflect more negative than positive responses.

Similar to last quarter, 93% of CEOs surveyed for the report still say they are preparing for a US recession over the next 12 to 18 months, while 87% believe the recession will be brief and shallow with limited global spillovers and 6% expect a deep recession.

“After improving sharply to start the year, CEO confidence ticked down slightly in Q2 and remains firmly in negative territory,” said Dana Peterson, chief economist of The Conference Board.

Peterson noted CEOs’ view of current economic conditions continued to be negative, with 55% of CEOs still reporting general economic conditions are worse than they were six months ago.

“Meanwhile, future expectations deteriorated in Q2: 56% of CEOs expect general economic conditions to worsen over the next six months, while 40% expect worse conditions in their own industry — up from 48% and 33%, respectively, in Q1,” Peterson said. 

In other findings:

• 33% of CEOs expect to expand their workforce over the next 12 months, down from 37% in the first-quarter survey, while 20% expect a net reduction in their workforce and 46% expect little change.
• 52% of CEOs said some problems attracting qualified workers somewhat improved compared to 57% reported in the first quarter.
• Regarding wages, 75% of CEOs expect to increase wages by 3% or more over the next year, down from 81% in the fourth quarter.

The survey for the report included responses from 139 CEOs and was conducted between April 10 and April 24.