Economic / Future Trends

Q1 2020 Vistage survey: Coronavirus begins to decimate CEO confidence

ceo confidence index cover

In Q4 2019, CEO confidence rose for the first time after falling for seven consecutive quarters, signaling growth ahead. Enter the coronavirus, which has brought our country — and the world — to a standstill in record time.

This changes everything.

No strategic plan was developed with the Black Swan event of COVID-19 in mind. With things changing so rapidly, it is hard to see where the bottom is. The duration of the health crisis will determine the depth of the financial crisis.

RELATED VIDEO: Vistage CRO Joe Galvin discusses the early impacts of COVID-19 on CEO confidence with Brent Leary, host of Small Business Trends interview series and co-Founder of CRM Essentials LLC

Just as CEOs began to consider the full significance of the corona-crisis, we conducted the Q1 2020 Vistage CEO Confidence Index survey. The survey, conducted March 2 – 9, captured input from 1,695 CEOs from small and midsize businesses.

During the course of the survey, multiple, cascading events affected CEO responses; coronavirus concerns heated up, stocks fell and oil prices crashed. Since the survey closed, events continue to unfold daily, with no sight to when the corona-crisis might start to slow.

Consequently, our Q1 2020 survey data captures the moment in time just before we started to stumble blindly down this path.

The Vistage CEO Confidence Index was at 84.7 in Q1 2020, down slightly from both the prior quarter (91.5) and prior year (91.6). Responses grew progressively more negative as additional information became available during the survey period.

In just one week, the percentage of CEOs who felt the economy recently worsened grew from 25% to 38%. And that was at the beginning. As noted by Dr. Curtin, a researcher from the University of Michigan who analyzed the data, “This trend in the data indicate that further declines in economic confidence are more likely as the virus spreads domestically.” Our next survey will be conducted the first week of April as we look to find the bottom and seek the path forward to recovery.

Compared with a year ago, have overall economic conditions in the United States improved, remained the same, or worsened?

ceo confidence index graph

Source: Q1 2020 Vistage CEO Confidence Index survey

Coronavirus concerns grow rapidly

When the survey opened, 38% indicated moderate to extreme concern about the impacts of coronavirus. After the rapid spread of the virus during the week, responses recorded the last day of the survey showed that number rose 48%. This trend in the data indicate that concerns will continue to increase while economic confidence decreases as small and midsize businesses face shutdowns, shelter-in-place declarations and declining volumes of customers.

At the time of the survey, CEOs reported the varied impacts of the coronavirus:

In which areas have you or your business been directly or indirectly impacted by the coronavirus?

ceo confidence index line graph
Source: Q1 2020 Vistage CEO Confidence Index survey

Since the survey closed and new restrictions have been put in place at state and national levels, we have seen the consequences deepen for employees and personnel as well as on the ability of businesses to serve customers amid mandated restrictions in nearly every state. As summarized by Dr. Curtin, “At the time of the survey, small and midsize businesses did not have a clear impact on profits and revenues that are now arising.”

Download the Q1 2020 Vistage CEO Confidence Index report to learn more about the sentiment of small and midsize business leaders, including:

  • Projections about the performance of the U.S. economy
  • Revenue and profitability expectations
  • Expansion plans for hiring and investments
  • Coronavirus impacts

About the Vistage CEO Confidence Index

Category: Economic / Future Trends

Tags:  , , , ,

Joe Galvin About the Author: Joe Galvin

Joe Galvin is the Chief Research Officer for Vistage Worldwide. Vistage members receive the most credible, data-driven and actionable thought leadership on the strategic issues facing CEOs. Through collaboration with the Vistage community of…

Learn More

Leave a Reply

Your email address will not be published. Required fields are marked *