From reading the press, I think it’s fair to say that we look to members of the financial sector to tell us where the economy is going. These soothsayers read the tea leaves using metrics like interest rates, capital expenditures, unemployment and stock market reactions. This is all well and good, but it is incomplete. I think it is also wise to tap into the collective wisdom of marketing leaders who have their fingers on the pulse of the market’s biggest engine—customers.
In the February 2013 CMO Survey, 468 U.S. CMOs rated their optimism for the economy on a scale of 0 (lowest) to 100 (highest). The average score was 62.7, which is up from 58.4 in August 2012. This ~10% increase is important but a set of follow up questions tells us even more. Specifically, CMOs were asked to state whether they were “more optimistic,” “less optimistic,” or “no change” compared to the prior quarter. In August 2012, results indicated that uncertainty was rampant with about one third of the sample more optimistic, another third less optimistic, and the final third no change (see Figure 1). Results of the February survey indicate that CMOs who were more optimistic increased from 29 percent of the sample in August 2012 to a whopping 56 percent in the current survey! This 93 percent increase offers a very strong signal that economic uncertainty is fading. (more…)
