Business Roundtable execs see brightening economy
American chief executives had a brightened perspective on the economy in the first quarter of 2012, and more of them plan to ramp up hiring and make more capital equipment investments, according to a recent Business Roundtable survey. 42% of executives are planning to add additional staff, and 48% expect to boost spending. Both numbers are a 16-point improvement from the prior quarter. 16% expect to reduce staff in the next six months.
The Roundtable’s CEO economic index rose to 96.9 in the first quarter of 2012 from 77.9 in Q4 2011. Any reading above 50 indicates growth.
The first quarter of 2012 saw improving economic indicators and a 12% rise in the S&P 500. 81% of executives expect their firm’s sales to increase in the next six months.
“The U.S is picking up. Europe is the one that is really headed to negative territory,” said Boeing CEO James McNerney on a media conference call. “While Asia and China are slowing down, they are still at a very high growth rate, and we need to hire people to satisfy their demand.” General Electric and Caterpillar are among companies that have been adding workers this year.
Roundtable-member CEOs upped their 2012 U.S. gross domestic product (GDP) forecast to 2.3% from 2.0% in December.
Despite the optimism, Boeing’s McNerney, who is also chairman of The Roundtable, said rising oil prices, a sluggish European economy, political uncertainty in the United States and questions about future Asian growth “remain as potential obstacles” to growth.
“We all wish that we could get some conclusions in Washington….at least to get some certainty, even if the answer isn’t perfect.”
Business Roundtable member firms generate annual revenues of $6 trillion and employ more than 14 million people.
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CEOs expect marked economic improvement this year (http://blogs.wsj.com/economics/2012/03/28/ceos-expects-marked-economic-improvement-this-year/). WSJ, March 28, 2012
CEO survey, the coverage (http://businessroundtable.org/blog/ceo-survey-the-coverage-/). Business Roundtable Today, March 28, 2012