According to the Q2 tracking study conducted by The Conference Board and The Business Council, CEO confidence has reached the highest level since the study started in 1976.
The press release from The Conference Board reports CEO confidence “improved further in the second quarter of 2021, following a sharp increase in Q1. The measure now stands at 82, up from 73.”
The release adds,
Sources: The Conference Board, The Business Council, National Bureau of Economic Research
The NFIB Small Business Optimism Index basically held steady in May, with five of the 10 Index components improving, three declining, and two remaining unchanged. The Index was reported at 99.6, a modest decline of 0.2 points from April.
According to the NFIB’s press release, “May saw a slight pause in the recovery of small business optimism after steadily increasing each month in 2021. The economy is doing very well currently, and owners are scrambling to take advantage of it by hiring and investing. The first five Index components in the table are at historically high levels.”
One concerning factor was the high degree of unfilled job openings, with 48% of small businesses reporting open jobs. The NFIB said job creation plans over the next three months rose to a net 27%, up six points. However, employment uncertainty and inflation concerns weighed on future expectations for overall business conditions, which showed a significant decline from April.
On the plus side, the NFIB reported,
FIGURE 2: SMALL BUSINESS OPTIMISM HOLDS STEADY IN MAY
Source: National Federation of Independent Business (NFIB)
Optimism for companies of all sizes is being fueled by many factors: the broad reopening of state economies, with most restrictions now lifted; an improving employment picture (despite some worker shortfalls and expected rising wages); favorable interest rate conditions; improved operating and technology efficiencies; enhanced plans for capital expenditures; and pent-up demand for products and services from both consumers and the business community.
McKinsey and Company notes in a recent article that while there will be a long-lasting impact of digital shopping adoption, in-person shopping is beginning to make a comeback. This should further help in the difficult recovery process for Main Street businesses.
Source: McKinsey Global Digital Insights survey
McKinsey also notes that companies are working to best adapt to their employees’ desires for more of a hybrid model for balancing in-person and remote working. They report that their research indicates that “52% of workers would prefer a more flexible working model postpandemic.”
The clear preference on the part of workers, and the efficiencies many employers have experienced in new remote workplace practices, are reflected in how employers broadly see an evolving workplace environment.
Source: McKinsey and Company
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