The Conference Board's measure of CEO confidence fell to a seven-year low of 39 in the fourth quarter of 2007, down from 44 in the third quarter. The last time the measure dropped below 40 was in the final quarter of 2000 when it sunk to 31.

"Given continued trouble in the housing and credit markets, persistent volatility in financial markets and increases in energy prices, it's not surprising that confidence has eroded," said Lynn Franco, director of The Conference Board Consumer Research Center. "Looking ahead, the majority of business leaders expect these lackluster economic conditions to prevail throughout the first half of 2008."

Only 7% of CEOs said economic conditions had improved in the fourth quarter, compared with 14% in the third quarter. Sixteen percent of CEOs expected business conditions to improve in the next six months compared to 20% who said the same in the third quarter.