In recent years we have been tracking the Conference Board’s reading of CEO confidence levels.  We are tracking this to see if it provides a reasonable leading indicator for economic activity.  We also started tracking the Canadian Export Development Corporation’s indexing of global trade and other economic forecasts.

September 2015

Our Synopsis: the global economy is slowly recovering from a historic financial crisis.  The USA is leading the recovery but there are strong headwinds caused by major social and economic turmoil in developing countries.  The 2014 oil price collapse and sharp declines in other commodity prices requires Canadians to yet again find growth through value-add industries, technological innovation and more productivity.

1. •July 2015 - Up to 58 from 57 in the first quarter of 2015 (a reading of more than 50 points reflects more positive than negative responses).  “Optimism among CEOs increased moderately in the second quarter with expectations for the U.S. and globally slightly more upbeat.  However, the outlook for China remains cautious while expectations for Brazil remain negative,” leaders’ assessment of conditions in their own industries was more positive, with 49 percent saying conditions in their own industries have improved, compared with 35 percent in the prior quarter.”
   

1. •May 2015 - Down to 57 from 60 in the fourth quarter.  “Optimism among CEOs retreated in the first quarter of 2015, and while expectations for growth prospects in the U.S. remained positive, they were less favourable than last quarter. Meanwhile, expectations for Europe, China and Brazil continued to decline,”
   

1. •Oil: September 2015, The IEA estimates that $45 oil shuts in 930,000 bpd of non-OPEC oil vs. 400,000 at just $1 more at $50.  “A drop of 400,000 would be the largest drop since 1992.”  (Canadian Business)
   

More information is available at: Conference Board

Global Perspective: World Bank Prospects

OECD Forecasts:

1. •June 2015, Global GDP growth is a “B-” situation - “rebounding but remains below normal”:  http://www.oecd.org/eco/outlook/economicoutlook.htm
   

Big Mac Index - a simple measure re: global monetary exchange rates

http://www.economist.com/content/big-mac-index

Past Posts

1. •April 2014 The index rose again to 63.  “CEO confidence rose to a two-year high, with both current conditions and expectations improving. CEOs were more positive about short-term growth prospects in the U.S. and Europe, but less positive about prospects for Japan and emerging markets.”
   

2. •Export Development Canada’s (EDC) semi annual Trade Confidence Index (TCI) rose to 77.2 which is the highest value since the post stimulus era (i.e. since 2011) and follows 3 consecutive increases since 2012. (TCI Index Web Site)
   

3. •July  2013 - 62 - up from 54 last quarter.  “Inflation was highest in the Netherlands (3.1 percent) and Norway (2.8 percent). By comparison, prices in the United States were up 1.8 percent. Switzerland (0.5 percent) and Denmark (0.4 percent) posted the smallest increases. In Japan, the HICP in July was 0.9 percent higher than a year ago, the second straight month of year-on-year price growth after nearly a year of negative inflation”.
   

4. •January 2012 - 49 - up from 42 in the previous quarter.  On the inflation front, CEOs anticipate price increases of about 1.8 percent for 2012, down from last year’s estimate of 3.3 percent.
   

5. •December 2011 - Confidence levels that dropped significantly as the year progressed appears to be turning slightly more positive towards the end of 2011 despite continued fears of a European crisis.   Resource exporters are facing challenges in a number of areas.
   

6. •January 2011 - 62 - rebounding from 50.  The board noted that “the cloud of permission that prevailed in the third quarter has lifted”.
   

7. •April 2010 - The Conference Board notes that 30% of CEOs plan to increase employment levels while 22% anticipate a decline.  Overall confidence remains above the 50% mark.