There’s good news and more troubling news in the Business Roundtable’s latest report on CEO expectations for the U.S. economy.

The trade group’s Economic Outlook Index, a barometer of how chief executives feel about the economy, jumped to 92.1 for the first quarter of 2014—a big leap from the 2013 fourth-quarter level of 84.5 and well above its long-term average of 79.7. In fact, it’s the index’s highest level in the past two years. (The finding corresponds with a similar one in the nonprofit space in a study by McKinley Advisors. Associations Now‘s Mark Athitakis pondered the implications of that research earlier this month.)

But the sunny outlook may not translate to a big leap in hiring—only 37 percent of the CEOs surveyed expect to increase headcount in the next six months. While that’s a modest rise from the previous survey’s 34 percent, it speaks to a bigger issue, according to Business Roundtable Chairman Randall L. Stephenson.

“CEO expectations for overall economic growth are well below our economy’s potential,” Stephenson, also the chairman and CEO of AT&T, said in a press release.

The report says the CEOs estimate a 2.4 percent increase in gross domestic product growth during 2014. As the Associated Press notes, that’s better than 2013’s 1.9 percent economic growth, but most economists lean toward a higher GDP projection of almost 3 percent for this year. In a conference call this week, Stephenson said his group thinks the GDP [PDF] has the potential to grow 4 to 4.5 percent.

So what could push it higher? According to the Business Roundtable, more agreement in Washington on key business issues, such as immigration reform for high-skilled workers, business tax reform, and the loosening of U.S. trade agreements. A key example of this, from the group’s perspective, is the budget deal worked out between congressional budget committee chairs Sen. Patty Murray (D-OR) and Rep. Paul Ryan (R-WI) late last year.

“To have a government that’s in regular order once again and actually operating under a budget, we think, is very important for driving investment and economic growth,” Stephenson told the Wall Street Journal this week. “We give a lot of credit to the Ryan-Murray plan.”

(iStock/Thinkstock)