U.S. CEOs Become More Optimistic on Outlook for Sales, Jobsby
Business Roundtable index rises to highest in six quarters
Outlook tempered by pullback in plans for capital spending
Chief executive officers of some of the largest U.S. companies became more optimistic about their sales and hiring prospects in the weeks before and after last month’s presidential election, even as they pared plans for capital spending.
The Business Roundtable’s CEO Economic Outlook Index -- a measure of expectations for revenue, capital spending and employment -- increased by 4.6 points to 74.2 in the fourth quarter, the highest since the second quarter of 2015, according to a survey released Tuesday. The gauge remains below its long-run average of 79.6. Readings above 50 indicate economic expansion.
The survey, with responses from 142 member CEOs, was conducted from Oct. 26 to Nov. 16. The Washington-based group said in an e-mail that there was no significant difference between the 107 responses before and 35 after Donald Trump’s victory in the Nov. 8 election.
The survey highlighted a key challenge for President-elect Trump, as a gauge reflecting plans for capital spending in the next six months declined 5.4 points to 64.2. At the same time, for the fifth straight year, CEOs said regulation was their top cost pressure, aligning with Trump’s promise to increase economic growth by eliminating various rules.
“We’re for a smarter, more effective approach to federal regulation. We’re hopeful the new administration and Congress will work together to make that a top priority,” Doug Oberhelman, the CEO of construction-equipment maker Caterpillar Inc., who serves as Business Roundtable chairman, said in a statement. As for trade, if “better deals” can be negotiated, “we’re all for it,” he said.
A measure of the sales outlook for the next six months rose 4.5 points to 102.8, as 67 percent of respondents saw revenue increasing. Expectations for hiring jumped 14.8 points.
Corporate leaders project the economy will expand 2 percent in 2017, the Business Roundtable said. That’s in line with the 2.2 percent median estimate of analysts surveyed by Bloomberg News.
The Business Roundtable represents companies with more than $6 trillion in revenue and about 15 million employees.