Fewer chief executive officers plan to boost hiring or capital spending in the U.S. through the end of the year as sales expectations ease, pointing to a cooling in the world’s largest economy, a survey showed.
The Business Roundtable’s economic outlook index decreased to 89.1 in the second quarter from 96.9 in the previous three months, the Washington-based trade group reported today. Readers greater than 50 are consistent with economic expansion.
“The dip in quarterly sentiment reflects concern over increasingly persistent obstacles to a stronger recovery, including uncertainty over year-end U.S. government tax and spending plans and a path to resolution of the euro-zone crisis,” Jim McNerney, chief executive officer of Boeing Co. and chairman of Business Roundtable, said in a conference call today.
A slowdown in hiring and capital investments is among reasons economists have been reducing estimates for U.S. growth. Federal Reserve policy makers are meeting today to determine if there is more than can do to stimulate the economy.
Thirty-six percent of CEOs surveyed said they will increase payrolls in the next six months, down from 42 percent in the prior quarter. Some 20 percent said they planned to reduce employment, up from 16 percent.
An increase in spending on new equipment is projected by 43 percent of respondents this quarter, down from 48 percent in the previous three months. Seventy-five percent of business leaders said they expected sales to increase in the next six months, down from 81 percent last quarter.
Procter & Gamble Co., the world’s largest consumer-goods company, today reduced its earnings and revenue forecasts for the second time in three months, hurt by slowing sales growth in Europe and the U.S. The reduction in forecasts by the maker of Tide washing detergent and Gillette razors illustrates the difficulties faced by consumer-products makers as rising unemployment in Europe and North America restricts spending.
The Business Roundtable survey, taken between May 17 and June 8, represented the responses of 164 company leaders. The association consists of chief executives of corporations with a combined workforce of more than 14 million employees and more than $6 trillion in annual revenue.