The Conference Board Measure of CEO Confidence, which had increased to prerecession highs in the first quarter, declined in the second quarter of 2017. The Measure now reads 61, down from 68 in the first quarter (a reading of more than 50 points reflects more positive than negative responses).

“CEO Confidence declined in Q2, but sentiment about the overall economy remains positive,” said Lynn Franco, director of Economic Indicators at The Conference Board. “CEOs are optimistic about the growth prospects for both mature and emerging economies, but expectations for Brazil have shifted from positive to neutral. Seven out of ten CEOs expect profits will increase over the coming year, with market/demand growth and cost reductions the major driving forces.”

CEOs who say conditions are better than six months ago fell 11 points from 71 to 60 percent. Their confidence in their own industries fell even more precipitiously, from 60 percent to 47 percent saying conditions have improved.

Currently, 41 percent expect economic conditions to improve over the next six months, compared to approximately 65 percent last quarter. The outlook for their own industries was also again less favorable, with 48 percent of CEOs anticipating an improvement over the next six months, down from 67 percent in the first quarter of this year.

CEOs are optimistic about profit expectations for the next twelve months, with about 71 percent expecting profits to increase, compared to 75 percent last year. Executives in the services industries are the most optimistic, with about 75 percent expecting profits to increase.

Among chief executive officers who expect profits to rise, 53 percent say market/demand growth will be the primary driving force, while 29 percent cite cost reductions. New technology is cited by 18 percent of CEOs, while none of the CEOs surveyed said price increases would be the primary source of improvement in profits.