Business Roundtable Releases Second Quarter 2008 CEO Economic Outlook Survey
Despite weakening labor market, CEOs investment plans and sales expectations hold steady Index dips five points amid ongoing housing declines, high energy prices
The Business Roundtable CEO Economic Outlook Index is based on a survey — conducted quarterly since the fourth quarter of 2002 — of our member CEOs’ plans for hiring and capital spending, and their expectations for sales, over the next six months. Taking these factors together, the survey signals the direction of the U.S. economy.
Washington, D.C. – The Business Roundtable CEO Economic Outlook Index - which reflects sales, capital expenditures and employment figures for the next six months - declined to 74.5 in the second quarter of 2008, down from 79.5 in the first quarter, according to results released today.
Most leaders of America's top companies still expect sales and capital expenditures to either increase or remain unchanged over the next six months, but more now anticipate a drop in future employment, according to the survey.
"This quarter's results reflect the broad cross currents at work in the U.S. economy," said Harold McGraw III, chairman of Business Roundtable and chairman, president and CEO of The McGraw-Hill Companies. "Our CEOs clearly have tempered their overall expectations against a backdrop of continued housing declines and mounting energy prices. That said, CEOs remain cautiously optimistic about their sales and spending projections."
Business Roundtable is an association of chief executive officers of leading corporations, representing a combined workforce of nearly 10 million employees and $4.5 trillion in annual revenues.
The survey's key findings for the next six months include:
CEO Economic Outlook Index for Second Quarter
On overall U.S. economic growth, member CEOs estimate that GDP growth will be 1.3 percent; down from the 1.5 percent GDP growth assumed last quarter.
The CEO Economic Outlook Index combines the responses on projected sales, capital spending and employment into an overall index, which shows how member CEOs believe the U.S. economy will perform in the six months ahead. This is a diffusion index centered on 50, meaning anything above 50 is expansion and anything below 50 is contraction.
The Roundtable's CEO Economic Outlook Survey, conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economic assumptions and outlooks of Roundtable member CEOs.
The survey was completed between May 22 and June 9 by 110 of the Roundtable's 160 member CEOs. The percentages in some categories may not add up to 100 due to rounding.