Confidence continues to climb.

RALLYING with strong stock market performance, Chief Executive's CEO Confidence Index rose for the second consecutive month, according to 223 top executives surveyed. The index rose by 2.4 points to 159.2. Polling was conducted during the election cycle.

Positive developments in the current business environment, like lower oil prices and signs of slowing inflation, caused CEOs to be especially confident about the current climate. The Current Confidence was the top-performing subindex, skyrocketing by 15.1 points to 210.1. Over half of the executives polled (54.3 percent) rated current business conditions as "good," the highest portion to do so in six months. Additionally, 57.4 percent of respondents rated current employment conditions as "good," the most bullish position since the inception of the index in 2002. The Employment Confidence subindex also performed well, rising by 13.3 points to 177.6 percent.

The forecast for the future was less optimistic, with 22.2 percent of respondents expecting hiring to decrease in the next quarter, and 15.8 percent expecting a gradual decline in the economy in the coming quarter. Said one respondent polled before the election, "I think the current economic condition is being managed for the election next week. I see a possible slowdown in the first and second quarter of next year." Poor future expectations, combined with strong current sentiments, caused the difference between current and future confidence to skyrocket by over 20 points. It is currently at an 85.2 point differential, its highest level ever. "CEOs are pleased that the economy is creating opportunities for growth," said Edward M. Kopko, CEO of Chief Executive Group. "However, they are worried about taking these good developments for granted."

Chief Executive Group also conducted additional polling this month, asking CEOs about their perceived business hurdles for 2007. Given the choice to voice their top three concerns from a list of options, CEOs said they were worried about attracting and developing talented people, top line revenue growth and health care (see chart below).

Many CEOs elaborated on their concerns. Norm Silverstein, president and CEO of the WXXI Public Broadcasting Council, said adapting to business changing needs "is like learning to juggle ... except what you are juggling is constantly changing." Richard A Russack of the BNSF Railway Company worried that "health care options are too varied, costs are too high, and national reform is required." Tim Koltek, CEO of Terrapin Energy, put it simply: "Retaining key talent is the key."