CEOs' economic outlook lowest since 2009
(Reuters) — Spooked by the United States' recent budget standoff in Washington and the European debt crisis, U.S. chief executives' view of the economy deteriorated sharply in the third quarter, a recent survey found.
Corporate chieftains told the Business Roundtable that they had become more likely to cut jobs over the next six months, and fewer expected to boost their companies' sales and capital spending over that time.
The group's CEO Economic Outlook index dropped for a second consecutive quarter to 77.6, its lowest reading since the fourth quarter of 2009. It remained above 50 — which separates forecasts of growth from decline — and a bit below the index's average of 79.2 over its near-decade history.
"This past quarter was a challenging one for our economy," said Boeing CEO Jim McNerney, who chairs the roundtable. "It brought high oil prices, continuing European sovereign debt crisis, our own debt-ceiling debate and the S&P downgrade in the U.S., which in sum added to an already uncertain economic and business environment."
A quarterly survey by the Business Roundtable found that 24 per cent of the 140 CEOs surveyed expected to cut jobs in the U.S. over the next six months, more than double the 11 per cent who had forecast that in the second quarter. Thirty-six per cent expected to add jobs, down from 51 per cent in the second quarter.
Persistently high U.S. unemployment, which hovers around nine percent, is blamed for the nation's prolonged economic sluggishness and is shaping up as a key issue in next year's presidential election.
The number of CEOs who expected their companies' sales to rise over the next six months fell to 65 per cent from 87 per cent and the number who expect to boost capital spending fell to 32 per cent from 61 per cent.
Overall, CEOs look for real U.S. gross domestic product to rise 1.8 per cent this year, sharply lower than the 2.8 per cent growth forecast in March.
