CEO Economic Outlook: Modest Uptick in Business Optimism, Especially for Investment, but Still Below Economy’s Full Potential
March 03 2015 - 10:02AM
Business Wire
CEOs Say Congressional Action on Trade Would
Boost U.S. Jobs, Competitiveness, Economic Growth
The Business Roundtable released its first quarter 2015 CEO
Economic Outlook Index, which provides a picture of the future
direction of the U.S. economy based upon CEOs’ plans for sales,
capital spending and hiring. The overall Index is up from the
fourth quarter of 2014, but has been in the same general range for
the past year and a half. The six-month outlook for sales hit a
three-year high this quarter.
CEOs said they expect 2015 gross domestic product (GDP) growth
of 2.8 percent, slightly below consensus estimates, but a 0.4
percentage point increase over their projection from the fourth
quarter of 2014.
“The U.S. economy and the job outlook are starting the year in a
stronger position than 2014. Almost half of CEOs plan to increase
capital spending in the next six months, which shows that passage
of tax-extender legislation late last year gave some companies
greater confidence to invest more in the United States,” said
Randall Stephenson, Chairman of Business Roundtable and Chairman
and CEO of AT&T Inc. “But we need to give more businesses the
confidence to increase investment to create more good-paying,
middle-class jobs and boost U.S. economic growth. That would happen
if Congress and the Administration pass Trade Promotion Authority,
as well as act on business tax reform, infrastructure investment
and smart regulation that encourage and accelerate business
investment.”
The CEOs’ response to a special question on the benefits of more
trade opportunities clearly indicates that increased international
trade would result in more U.S. hiring.
Survey Results
CEO expectations for sales, investment and hiring increased 7.4
points, 9.2 points and 0.4 points, respectively. The survey’s key
findings from this quarter and the fourth quarter of 2014
include:
CEO Survey Results & Sub-Indices 2014
Q4 2015 Q1
Quarter-QuarterChange
inSub-Index
Increase
NoChange
Decrease
Sub-Index
Increase
NoChange
Decrease
Sub-Index
How do you expect your company’s U.S.
sales tochange in the next six months?
74% 18% 9%
115.1 80% 13%
8%
122.5
+7.4
How do you expect your company’s U.S.
capital spending tochange in the next six months?
36% 50% 13%
73.3 45% 43%
13%
82.5
+9.2
How do you expect your company’s U.S.
employment tochange in the next six months?
40% 36% 23%
67.1 40% 38%
23%
67.5
+0.4
First Quarter 2015 Business Roundtable CEO Economic Outlook
Index
The Business Roundtable CEO Economic Outlook Index – a composite
index of CEO plans for the next six months of sales, capital
spending and employment – rebounded in the first quarter of 2015 to
90.8 from 85.1 in the fourth quarter of 2014. The long-term average
of the Index is 80.5.
About the Business Roundtable CEO Economic Outlook
Survey
The Business Roundtable CEO Economic Outlook Survey, conducted
quarterly since the fourth quarter of 2002, provides a
forward-looking view of the economy by Business Roundtable member
CEOs. The survey is designed to provide a picture about the future
direction of the U.S. economy by asking CEOs to report their plans
for their company’s sales, capex and employment in the next six
months. The data are used to create the Business Roundtable CEO
Economic Outlook Index and sub-indices for sales, capex and hiring
expectations – diffusion indices that range between -50 and 150 –
where readings at 50 or above indicate an economic expansion, and
readings below 50 indicate an economic contraction. A diffusion
index is defined as the percentage of respondents who report that a
measure will increase minus the percentage who report that the
measure will decrease.
The first quarter 2015 survey was completed between Jan. 26 and
Feb. 13, 2015. Responses were received from 120 member CEOs, 59
percent of the total Business Roundtable membership. The
percentages in some categories may not equal 100 due to rounding.
Results of this and all previous surveys can be found at
www.brt.org/resources/ceo-survey.
Business Roundtable CEO members lead companies
with $7.2 trillion in annual revenues and nearly 16 million
employees. Business Roundtable member companies comprise more than
a quarter of the total market capitalization of U.S. stock markets
and invest $190 billion annually in research and development –
equal to 70 percent of U.S. private R&D spending. Our companies
pay more than $230 billion in dividends to shareholders and
generate more than $470 billion in sales for small and medium-sized
businesses annually. Business Roundtable companies also make more
than $3 billion a year in charitable contributions.
Please visit us at www.brt.org, check us out on Facebook and
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Business RoundtableAmanda DeBard, 202-496-3269