CEO confidence hits record low.

THE CEO CONFIDENCE INDEX HAS HIT ITS LOWEST LEVEL since Chief Executive magazine began tracking executive market sentiment. This month, according to 321 top executives surveyed, overall confidence fell 25.3 points from February to 84.1.

With its inaugural report on CEO confidence in October 2002 the CEO Confidence Index and all component indices, which track confidence in more targeted areas of the economy from employment to capital spending to future business plans and more, were normalized to an initial level of 100. Since then Confidence has risen to levels above 200, but now is below 100 for the first time.

CEOs weighed in among the spate of news recently highlighting general fears regarding the U.S. economy. The dramatic drop in confidence to 84.1, which stood at 123.7 in January and 169.3 last July, means CEOs have become sharply and decidedly worried about current economic conditions. A full majority of respondents (52 percent) said they would characterize current business conditions as "bad," while 45.1 percent said they expect the economy to experience "gradual" or "rapid" decline over the next quarter.

Many CEOs see the market correction the U.S. economy is currently experiencing as necessary. One respondent noted that "The economy needs to work through the problems caused by the sub-prime abuses without government tinkering that will make it worse." Daniel Dykens, CEO of Norbury Financial Systems, said, "Raising corporate tax rates will chase corporations overseas to low tax havens such as Ireland and will have a very negative impact on the economy." C-suite calls for restraint, however, in no way seek to undermine how serious the problems facing the economy are. While the gap between current and future confidence is currently around 40 points, down from a high of more than 85 points in November 2006, CEOs are clear to point out that the worst may not be over.

The last time executive confidence experienced a dramatic upswing was in 2003. The Future Confidence index led Current Confidence until January of 2004. At that point Future Confidence hit its peak and was simultaneously overtaken by Current Confidence. It has yet to recover, suggesting a substantial increase in confidence in the future of the economy is necessary for a turnaround to take place.