“Supply chain disruptions in conjunction with labor shortages have caused inflationary pressures that are slowing down the economy,” says Karim Chichakly, co-president of software developer and manufacturer isee systems. “Federal spending, both current and upcoming, will add to those pressures. Interest rates will have to rise, further slowing down the economy. The pandemic will still be with us next year with all the uncertainties that brings with it,” he says to explain his downgrading of conditions a year from now.  

Dave Goodin, president and CEO of MDU Resources Group, a large diversified natural resources company based in Bismarck, North Dakota, cites “continued fall out from Covid-related events; vaccine mandates; labor challenges; supply side challenges; growing inflation; looming tax changes” among the list of reasons for his declining forecast for the year ahead.  

David Castellini, CEO of Nevada-based financial services firm Note Funding Center, has similar concerns: “Covid implications; uneconomical Govt. proposals; consumer malaise; global economic softening; continued supply chain issues; FedRes missteps,” although he projects things will get better next year. 

“Lack of workers, supply chain interruption, non-functional federal government that interferes, federal spending and inflation,” says Charles Drobny, CEO and president of Houston-based oilfield technology company GlobaLogix, echoing others. He forecasts conditions will weaken to a 4 out of 10 (“weak” according to our scale) by this time next year, down from a 7/10 today. 

For Steven Muro, president of Fusion Marketing, a California-based agency specializing in the retail channel for perishable and packaged goods, the focus is on politics. “The administration is driving hard change (taxes, mandates, spending, inflation, IRS expansion) without a clear understanding (or a total disregard) of the impact these will have on businesses. And they just keep piling on,” he says. While he still rates current business conditions a 7 out of 10, he forecasts they will deteriorate to a 4/10 by this time next year. 

For Kirk Jefferies, CEO of Texas-based food retailer Lunch Mony, the labor shortage is the main challenge for his business. He cites “lack of employees to run business at 100 percent,” as the main driver, adding that his workforce is expected to decrease slightly over the coming months. 

“Without the ability to hire workers at all levels to do our work, we’re struggling,” echoes Jeff Lighthiser, CEO of Virginia-based engineering firm Draper Aden Associates, also noting that wage inflation is increasing. 

“Inflation and lack of skilled/available workforce will have a negative impact on demand and costs,” says Shaun Burke, CEO at Guaranty Bank, a community bank in Southwest Missouri, to explain his forward-looking rating of 5 out of 10 from an 8/10 today. 

Many CEOs noted that demand is growing significantly, but that there are many roadblocks preventing them from filling orders and pursuing growth. 

“Demand is high right now, but supply chain constraints will limit topline sales while pressuring margins due to limited pricing power and/or mid-season raw material/supplier price increases (inflation),” explains John Archer, executive chairman of Ohio-based sporting and athletic goods manufacturer Kent Watersports. For that reason, he expects conditions to dip slightly over the next year, from an 8/10 to a 7/10. 

“I believe capital spending will remain strong through next year, but it will be difficult for it to stay at this elevated pace it’s at today. Supply chain issues, rising interest rates and most of all inflation will begin to take its toll,” says Jim Nelson, president of lab instrument manufacturer Parr Instrument Company in Moline, Illinois. “I’m also very concerned about tax rates and how it will affect pass-through entities,” he says. 

“Our backlog is high, [but] some of our suppliers are struggling to meet our needs,” says Doug Short, CEO and president of Technifab Products, a fabricated metal products manufacturer in Indiana. He rates his forecast for business one year from now a 6 out of 10, down from an 8/10 today. “I am concerned about upcoming inflation,” he says. 

Denise McIntosh, CEO of Custom Powder Systems, a Missouri-based industrial manufacturer, says “supply chain issues and lack of skilled employees are delaying the orders we do have in house.” She, nevertheless, forecasts conditions to improve once we get past current disruptions. 

She is among the narrowing proportion of CEOs who look at October 2022 with optimism: 33 percent in October compared with 40 percent just one month prior. Instead, the proportion forecast conditions to deteriorate over the next 12 months ticked up one percentage point this month, to 35 percent, while those forecasting the status quo rose to 31 percent from 26 percent in September.  



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