CEOs More Optimistic on Prospects for Sales, Hiring
CEOs of some of the largest U.S. companies became more optimistic about their sales and hiring prospects in the weeks before and after the presidential election in November, 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 Dec. 6. 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 between Oct. 26 and Nov. 16. The Washington-based group didn’t detail differences in responses before and 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 are encouraged by the promise of a renewed focus to usher in a smarter regulatory environment that promotes job creation and economic growth and also protects safety, health and the environment,” Doug Oberhelman, the CEO of construction-equipment maker Caterpillar Inc., who serves as Business Roundtable chairman, said in a statement.
A measure of the sales outlook for the next six months rose 4.5 points to 102.8, as 67% of respondents saw revenue increasing. Expectations for hiring jumped 14.8 points.
Corporate leaders project the economy will expand 2% in 2017, the Business Roundtable said. That’s in line with the 2.2% 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.
