Business Roundtable CEO Survey Mixes Good News, Bad News
The executive trade group's most recent economic indicator study was a mixed bag, with CEOs saying that they were more likely to hire but less likely to spend on capital investment.
The Business Roundtable’s newest numbers are out—and for all the ups in the survey, there are plenty of downs.
The second-quarter results from the 2014 CEO Economic Outlook Survey, released Tuesday, show that the 131 respondents have a more optimistic take on economic growth: The group’s CEO Economic Index reached 95.4, the index’s highest number in more than two years. But that news is tempered by the survey’s prediction of a 2.3 percent increase in gross domestic product (GDP) in 2014—a drop from the prior quarter, and a growth rate the group describes as sluggish compared with other economic recoveries.
And while more CEOs anticipate hiring in the next six months—43 percent, up from the prior quarter’s 37 percent—they’re less likely to spend on capital investment. The survey indicates that 44 percent of CEOs expect to increase capital investment over the six-month period, a 4 percent drop from the first quarter. And both of these metrics, the association says, show that the economy is struggling to perk back up.
“CEO expectations for both investment and growth remain well below the potential of the U.S. economy and below what we should be experiencing at this stage of a recovery,” Business Roundtable Chairman Randall Stephenson said in a press release.
Other CEO Concerns
The survey also highlights issues the business community sees as restraints on the economy over the long term.
Among them: lack of progress on tax reform in Congress, a continuing headache for the business world, according to respondents. In answer to a special question asked specifically for this survey, 77 percent of respondents said that temporary tax extenders legislation would have a positive economic impact on their businesses.
Stephenson, chairman and CEO of AT&T, Inc., urged Congress to act on the issue or at least make steps toward lasting reform.
“The first step toward immediate growth should be passage of business tax extenders legislation that serves as a bridge to tax reform,” he added.
Other issues that CEOs are watching include immigration reform and trade expansion. The unstable geopolitical climate—as seen in Ukraine and Iraq—is another concern, in that it could have a ripple effect on the world economy by leading to higher oil prices, according to a Wall Street Journal report on the survey.