Global CEO confidence fell again in the fourth quarter following a decline in the third quarter, according to The Conference Board. Its measure of CEO confidence decreased to a level of 42 from 55 in the third quarter. This is the lowest reading since the third quarter of 2012, when the measure also hit a level of 42.

A reading of more than 50 reflects more positive responses than negative ones.

“CEO confidence declined in the fourth quarter, with both current conditions and expectations contributing to the year-end decline,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Looking ahead, CEOs have grown apprehensive about growth prospects for the US, while sentiment regarding China and Europe has grown more pessimistic. India remains a bright spot, with CEOs mildly optimistic about growth prospects in early 2019.”

Franco noted ongoing trade and tariff issues, volatility in the financial markets, cost of debt, and expectations of moderating global growth are heightening concerns.

“If these conditions persist, we are likely to see weak confidence readings in the new year,” Franco said.

Looking ahead, CEOs’ expectations regarding the economic outlook have also turned negative. Currently just 12% expect economic conditions to improve over the next six months, down from 23% in the third quarter. Meanwhile, about 54% expect economic conditions will worsen, compared to 22% last quarter.

Expectations regarding short-term prospects in their own industries over the next six months were also more pessimistic. Only 14% now anticipate an improvement in conditions, down from 22% last quarter, while 44% expect conditions to worsen, up from 19% in the third quarter.

CEOs’ assessment of current global conditions continues to grow more pessimistic. Sentiment declined sharply for the US, although it remains in slightly positive territory. Sentiment regarding China and Europe has declined significantly over the past two quarters. The declines in Japan and Brazil have been more moderate, but both markets are still viewed negatively by CEOs. CEOs’ assessment of current business conditions in India declined marginally but overall remains slightly positive. 

Looking ahead, CEOs are moderately optimistic about short-term prospects for India, while expectations for all other markets have turned negative. Short-term prospects for the US declined considerably, while growth expectations for China and Europe have shifted further into negative territory. Expectations for growth prospects in Japan and Brazil remain slightly negative, though the latter did see a modest improvement. 

The CEO Confidence Survey Fourth Quarter 2018 was fielded from mid-November to mid-December.