Confidence among U.S. CEOs has fallen sharply in the midst of the COVID-19 pandemic. The Conference Board Measure of CEO Confidence decreased from 43 in the fourth quarter of 2019 to 36 in the first quarter of 2020—a reading of more than 50 points reflects more positive than negative responses. Additionally, a follow-up survey from late March to early April showed a further decline to 34.

“In late March, CEO confidence declined to levels not seen since the height of the Great Recession. The sharp fall was driven by a dramatic deterioration in sentiment about the current state of the economy,” says Lynn Franco, senior director of economic indicators and surveys at The Conference Board. “So, it comes as no surprise that more than 80 percent of these executives said COVID-19 has substantially impacted their business.”

The Conference Board surveyed CEOs during two timeframes—from mid-February to mid-March and from late March to early April. Asked about the current state of the economy and their own industry during the first timeframe, more than 70 percent of participating CEOs said the state of the economy has deteriorated compared to six months ago and 55 percent said the state of their own industry has deteriorated compared to six months ago. Asked during the latter, when the economy had further deteriorated, 97 percent of CEOs said conditions had deteriorated and were significantly worse than they were six months ago, and 92 percent said the same about the outlook for their own industry.

The increased pessimism is attributed to the March 26 Department of Labor report that in one week alone, 3.3 million Americans filed for unemployment insurance. In addition, by late March several states had already begun enacting various social distancing measures and there were abundant signs showing a severe pullback in consumer spending.

CEOs were also asked about the future of the economy and their own industry. When asked during the  mid-February to mid-March timeframe, only about a quarter of CEOs felt that both the economy and their own industry will improve six months down the road. When asked again in late March to early April, about half of CEOs expected the economy and their industry to improve six months from now.

The Conference board says that this increase in optimism stems from CEOs more likely having had more time to digest the consequences of the economic fallout and develop plans to respond to it. In addition, both the Federal Reserve and U.S. Congress had enacted measures to help prop up credit markets, the economy, businesses and consumers.

Bart van Ark, chief economist at The Conference Board adds, “Despite the overall decline in confidence and negativity about the present situation, by early April CEOs felt less pessimistic about the short-term outlook. This suggests that while CEOs see brighter days ahead, they also expect to experience major consequences from the current crisis. For example, workers, profits, sales and investment activity will all take a hit, and such impacts could endure post-crisis.”

The CEOs who responded in late March and early April also weighed in on the business impacts of COVID-19, along with how they are reacting. More than 80 percent said their business has been, or will be, substantially impacted by COVID-19.