Business Roundtable: Big company CEOs cautious about economy
The CEOs of the country's largest companies plan to boost capital spending over the next six months, but have lower sales and employment expectations, according to the Business Roundtable’s third-quarter CEO index. "Sales forecasts are down from last quarter, prompting CEOs to remain cautious," said Ivan G. Seidenberg, chairman of the Business Roundtable and chairman and CEO of Verizon Communications. "However, they are preparing for future demand by increasing investment in capital." The survey showed 49% of CEOs expect higher capital spending over the next six months, up from 43% who said they expectetd increased capital outlays in the previous quarter's survey. Only 31% expect to hire in the next six months, however, down from 39% who planned to hire when the second- quarter survey was taken. CEOs also were more cautious about expected sales increases with 66% saying they expected sales to increase in the next six months, down from 79% who saw an increase when the 2Q10 survey was taken. (Click to expand.) In terms of the overall U.S. economy, member CEOs estimated real GDP will grow by 1.9% in 2010 — down significantly from the 2.7% increase in the previous survey. Despite being cautious, CEOS were still more optimistic than they were in the fourth quarter of 2009. (Click to expand.) The index decreased to 86 in the third quarter of 2010, down from 94.6 in the second quarter of 2010, but still higher than 71.5% in 4Q09. Business Roundtable’s CEO survey has been conducted quarterly since the fourth quarter of 2002 and provides a forward-looking view of the economy by its members. The survey was completed between Sept. 1 and Sept. 21. The percentages in some categories may not equal 100 due to rounding. The group's members consist of chief executive officers of leading U.S. companies with nearly $6 trillion in annual revenue and more than 12 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets. Write to Kerry Curry.