The Economy

CEOs Fear the Economy Will Worsen: Business Roundtable

Company chiefs project that that sales, capital spending, and hiring will pull back over the next six months, the Business Roundtable reports.
Katie Kuehner-HebertDecember 1, 2015

Chief executives across the country are increasingly worried that the economy will worsen, according to the Business Roundtable’s fourth-quarter 2015 CEO Economic Outlook Survey, released Tuesday.

The Business Roundtable CEO Economic Outlook Index — a composite of CEO projections for sales and plans for capital spending and hiring over the next six months — declined 6.6 points, from 74.1 in the third quarter of 2015 to 67.5 in the fourth quarter. This third consecutive quarterly decline brought the index to its lowest level in three years. The long-term average of the Index is 80.1.

For the first six months of 2016, CEO expectations for sales decreased by 3.2 points and their plans for capital expenditures by 16.7 points. Hiring plans were essentially unchanged from last quarter, when they declined by nearly 8 points. In their first estimate of real GDP growth for 2016, CEOs expected 2.4% growth.

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“Lower expectations for sales and investment reflect CEOs’ ongoing caution about the near-term prospects for U.S. economic growth,” said Randall Stephenson, CEO of AT&T and chairman of the Business Roundtable, in a release. “Congress and the Administration need to work together to continue to fund the government, expand trade, agree on a long-term transportation infrastructure investment plan, reauthorize the U.S. Export-Import Bank and renew expired tax provisions.”

Stephenson also said it makes no sense to allow tax policies such as bonus depreciation and the research and development tax credit to expire this year absent broader corporate tax reform.

Meanwhile, CEOs again reported that regulation was the top cost pressure facing their businesses, followed by labor costs and health-care costs.

“If we want to see the U.S. economy and hiring really take off, Washington needs to adopt a smarter approach to regulation,” Stephenson said.