Posted on 12/17/2003 12:09:41 PM PST by Starwind
U.S. CEOs see higher sales, neutral on job growth Wednesday December 17, 2:31 pm ET
NEW YORK, Dec 17 (Reuters) - Leading U.S. chief executives overwhelmingly expect their companies to post higher sales in the first half of next year, but only a minority see higher capital spending or more jobs created by their companies, according to a survey by the Business Roundtable released on Wednesday.
The survey, conducted by the country's main association of CEOs, reflects the cautiously optimistic outlook of most economists, who see the economy improving but held back by sluggish growth in jobs.
As a result of the survey, the Business Roundtable said its CEO Economic Outlook Index rose to 89.6 for December, up from 67.7 in October. A reading of 50 indicates no change in conditions is expected.
According to the survey, 93 percent of the CEOs polled expected higher sales for their companies over the next six months, but only 35 percent expected higher U.S. capital spending.
Only 25 percent expected to hire more workers in the next six months, while 50 percent saw no change and 25 percent expected to shed jobs.
WASHINGTON, Dec. 17 /PRNewswire/ -- The Business Roundtable's CEO Economic Outlook Survey shows that America's leading CEOs expect a marked improvement in economic conditions, with strong increases in sales expected and significant capital investment planned in the first six months of 2004. The CEOs' economic projections led to a sharp increase in the Roundtable's CEO Economic Outlook Index to 89.6 for December, up from 67.7 in October.
"CEOs are clearly optimistic that the U.S. economy will continue to strengthen in the first half of 2004," said Hank A. McKinnell, Chairman of the Roundtable and Chairman and CEO of Pfizer Inc. "This survey is another strong indicator of broad improvement of business conditions, as nearly every CEO is projecting increases in sales, and many expect increased capital spending and employment."
The key findings of the survey for the next six months include:
. No . Decrease Change Increase . . 1. How do you expect your company's . sales to change in the next six months? 4% 3% 93% . . 2. How do you expect your company's . U.S. capital spending to change . in the next six months? 6% 59% 35% . . 3. How do you expect your company's . U.S. employment to change . in the next six months? 25% 50% 25% .
On average, CEOs expect real GDP growth to be 3.6 percent in 2004. The average annual GDP growth over the past decade has been 3.2 percent.
In an indication of improving economic conditions, the Roundtable survey shows that 25 percent of CEOs are projecting increases in employment, a doubling of the number planning to hire new workers since the last survey in October (12 percent). Overall, 75 percent of the CEOs projected employment to increase or remain the same in the next six months.
"Given the survey results, the Roundtable's CEO Economic Outlook Index has surged on our December survey to the highest level seen on any of our surveys to date. The dramatic positive shift compared with previous indexes shows that America's largest companies believe the U.S. economy is poised for strong performance during the first half of 2004," McKinnell said.
The CEO Economic Outlook Index combines the CEOs' responses on projected sales, capital spending and employment into an overall index that shows how the CEOs believe the U.S. economy will perform in the months ahead. The CEO Economic Outlook Index from the December survey is 89.6, which is a significant improvement from the 67.7 figure from October's CEO survey.
. CEO ECONOMIC OUTLOOK INDEX . . Survey CEO Economic . Date Outlook Index . . December 2003 89.6 . October 2003 67.7 . July 2003 64.5 . April 2003 49.3 . November 2002 52.7 .
Rising Health Care Costs Remain Greatest Economic Pressure
The Roundtable's survey also indicates that companies continue to deal with significant cost pressures. Nearly 58 percent of the CEOs identify rising health care costs as their company's most significant cost pressure today, while 24 percent identify litigation costs, 7 percent cite energy costs, and 6 percent cite pension costs.
"As the Roundtable works aggressively to promote economic growth and job creation, we will continue to look for ways to address barriers such as rising health care and litigation costs," added McKinnell.
The Roundtable's CEO Economic Outlook Survey, which has been conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economic assumptions and outlooks of Roundtable companies. The December survey was completed by 120 of the Roundtable's 150 member companies. The percentages in some categories do not add up to 100 because of rounding. A comparison of all surveys can be found at http://www.businessroundtable.org.
The Business Roundtable is an association of chief executive officers of leading corporations with a combined workforce of more than 10 million employees in the United States and $3.7 trillion in annual revenues. The chief executives are committed to advocating public policies that foster vigorous economic growth and a dynamic global economy.
SOURCE Business Roundtable Web Site: http://www.businessroundtable.org
Of course not. That would mean less money in their pockets.
I don't know why this surprises anyone. Fortune 500 companies haven't done much new hiring for almost a quarter Century.
Exactly. The Business Roundtable is a pro big business, pro big government organization. Only the largest businesses are allowed to join.
Contrary to their wishful thinking, all of our growth will come from small businesses, just as it has for decades. One should note that our Treasury Secretary, John Snow used to head the Business Roundtable.
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