CEOs are feeling more confident about economy — and concerned about the election

US business leaders are feeling more bullish about the direction of the economy — even as their worries about the upcoming presidential election mount.

For the first time in two years, optimism outweighs pessimism among CEOs, according to a CEO confidence measure for the first quarter released by The Conference Board on Thursday.

The survey found 36% of CEOs expect economic conditions to improve in the short term, up significantly from 19% last quarter. Those findings mirror growing confidence in a soft landing — one that looked very unlikely just a year ago.

In another sign that recession fears are ebbing, just 27% of the CEOs expect economic conditions to worsen over the next six months. That’s down from 47% during the fourth-quarter survey.

However, business leaders are growing concerned about how the political situation could impact their businesses.

Most CEOs (51%) say political uncertainty ahead of the 2024 election will be the greatest US challenge affecting businesses this year, according to The Conference Board.

That’s easily the top risk cited by CEOs. The next-closest challenges are increased regulation (15%) and high interest rates (12%).

Some economists have warned that another contested election would cause uncertainty that hurts markets and the economy and raise the specter of social unrest.

“CEOs are feeling better about the economy, but remain cautious about risks ahead,” Roger Ferguson, vice chairman of The Business Council and trustee of The Conference Board, said in a statement.

Business leaders upgraded their assessment of how the economy is currently doing. About one-third (32%) of the CEOs report economic conditions to be better than six months ago, up from just 18% at the end of last year. Only 22% say conditions were worse, down from 32% previously.