05 Dec Top CEOs more optimistic on economy, expect to spend and hire more
Chief executives of some of the nation’s largest companies are more optimistic about the economy than they were three months ago and expect to increase spending and hiring over the next half-year, according to survey results released Wednesday by a leading trade group.
The CEO Economic Outlook Index, compiled by the Business Roundtable, increased to 84.5 in the fourth quarter from 79.1 in the previous quarter. It was the highest level since the second quarter of 2012.
“The index signals that CEOs expect modest improvement in the outlook for economic expansion into the first half of 2014, said Boeing Co. Chief Executive Jim McNerney, the group’s chairman.
The Business Roundtable is a trade group of chief executives of large U.S. companies.
The improved outlook came in large part because the 120 chief executives who responded to the survey last month said they planned to spend more on their businesses.
About 39% of respondents said they expected to increase capital expenditures in the next six months, up from 27% in the previous quarter.
There were smaller increases in hiring plans and sales forecasts.
About 34% of chief executives said they expected to expand their payrolls, up from 32% in the previous quarter. And 73% forecast increased sales over the next six months, up from 71%.
The survey found CEOs expect the economy to grow a modest 2.2% in 2014, the same level they projected in the past two surveys.
McNerney said the economy continues to grow slowly and chief executives are watching Washington closely as Democrats and Republicans try to avoid another government shutdown next month.
“CEOs remain concerned about ongoing uncertainty stemming from the ongoing fiscal stalemate,” he said.
The fight over spending, McNerney said, has prevented Congress from doing two things that he said would spur growth: overhauling the corporate tax code and passing immigration reform.
Lawmakers are trying to negotiate a budget bill before Jan. 15, when a short-term spending plan expires. The federal government was shut down for 16 days in October as Democrats and Republicans fought over spending and raising the nation’s debt limit.