Record drop in CEO confidence continues.

THE RECORD DROP IN CEO CONFIDENCE continued in September. According to 180 top executives surveyed, CEO confidence fell to its lowest level in four years. The leading economic indicator, which measures C-Suite confidence in various aspects of the economy from hiring, to investing, to the overall business climate, fell by 13.5 points to 130.5. Polling was conducted just prior to the 50 basis point Federal Funds Rate cut on Sept. 18. All of the five component indices, which measure confidence in more targeted areas of the economy, fell substantially as well.

The Employment Confidence Index plummeted by 31.5 points (19 percent). Over one in three executives surveyed said they expect hiring to decrease over the next quarter; one in five said they expect employment to increase over the next quarter.

The Current Confidence Index fell by the second largest amount this month. The Index is off 38.3 points (23 percent) from its high of 169.3 in July, before worries about the credit markets began to take center stage in business news. This is the most pessimistic executives have been about the economy since August 2003.

The fall from July to September is the largest consecutive drop since Chief Executive began tracking executive sentiment in October 2002. This trend is especially poignant, as the public markets have held value while the Index has encountered a major readjustment.

With the recent explosion and rising popularity of social networking sites like Facebook, MySpace and LinkedIn, CE asked executives how they perceive these sites. Thirty percent of CEOs said they have profiles on one of the leading social networking sites, leaving 70 percent who do not. Additionally, 70 percent said these sites would play only an "insignificant" to "moderate" role in business over the next three to five years; however, 20 percent said the impact would be significant. "LinkedIn is a remarkable resource," one CEO remarked. "We find new ways of using this site all the time."

CEOs also were asked whether their human resources departments use social networking sites for recruiting purposes. Three-quarters responded no, which means more CEOs use social networking sites personally than at their own organizations.