CEO Economic Outlook Index

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.

Business Roundtable CEO Economic Outlook Index Eases, Remains Near Historic High

CEO Plans Strong Yet Slightly Diminished Amid Increased Uncertainty Around Government Policies, Particularly Trade

Washington — Following a record-high CEO outlook in the first quarter of 2018, the results of the Business Roundtable second quarter CEO Economic Outlook Survey released today show strong CEO plans for the coming months, but a modest decline in the overall economic outlook — amid increased uncertainty surrounding government policies, particularly the direction of U.S. trade policy.

The Q2 2018 CEO Economic Outlook Index — a composite of CEO expectations for sales and plans for capital spending and hiring over the next six months — fell to 111.1 in the second quarter of 2018, declining 7.5 points from 118.6 in the first quarter. While this is the first time the Index has declined in nearly two years, the Index remains well above its historical average of 81.2 for the sixth straight quarter. This signals a continued positive direction for the U.S. economy despite modest declines in all three components of the Index. The new survey also shows a CEO projection of 2.7 percent U.S. GDP growth in 2018, a small decrease from the 2.8 percent projection last quarter.

CEO plans for hiring dipped slightly to 95.5, down 3.0 points from the previous quarter. Plans for capital investment fell to 107.6, a decrease of 7.8 points from Q1 2018. Expectations for sales fell to 130.3, a decrease of 11.6 points from last quarter.

In a special trade-related question this quarter, CEOs expressed concern over the Administration’s approach to international trade issues. Specifically, 95 percent of the CEOs who responded to the special question said that “foreign trade retaliation leading to lower U.S. exports” was a moderate or serious risk, 91 percent said that “higher costs of imports for U.S. consumers” was a moderate or serious risk, 90 percent said that “higher input costs for U.S. businesses” was a moderate or serious risk, and 89 percent said that “lower U.S. economic growth” was a moderate or serious risk.

Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan Chase & Co. and Chairman of Business Roundtable said, “For the sixth straight quarter, business leaders are expressing historically strong optimism about our economy — and that’s delivering more jobs and increased wages to millions of Americans. To sustain this momentum, we need to ensure that we have competitive trade policies in place to provide the certainty necessary to deliver sustainable economic growth to create more opportunities for workers and families nationwide.”

 

Joshua Bolten, Business Roundtable President & CEO, added, “We continue to see strong CEO plans in the second quarter of 2018, but uncertainties about trade policy are a growing weight on economic progress – especially amid escalating trade tensions. America’s current and future economic vitality depends on productive talks with China and a successful modernization of NAFTA. Business Roundtable will continue to be a constructive partner for the Administration and a strong advocate for policies that support new jobs, investments and economic growth in America through free and fair trade.”

  

Survey Results

The survey’s key findings from this quarter and the first quarter of 2018 include:

Survey Results

Second Quarter 2018 Business Roundtable CEO Economic Outlook Index

The Business Roundtable CEO Economic Outlook Index — a composite index of CEO plans for the next six months of sales, capital spending and employment — decreased from 118.6 in the first quarter of 2018 to 111.1 in the second quarter of 2018.

About the Business Roundtable CEO Economic Outlook Survey

The Business Roundtable CEO Economic Outlook Survey, conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economy by Business Roundtable member CEOs.

The survey is designed to provide a picture of the future direction of the U.S. economy by asking CEOs to report their plans for their company’s sales, capex and employment in the next six months. The data are used to create the Business Roundtable CEO Economic Outlook Index and sub-indices for sales, capex and hiring expectations. These indices are diffusion indices that range between -50 and 150 — where readings at 50 or above indicate an economic expansion, and readings below 50 indicate an economic contraction. A diffusion index is defined as the percentage of respondents who report that a measure will increase, minus the percentage who report that the measure will decrease.

The second quarter 2018 survey was conducted between May 7 and May 21, 2018. Overall, 132 CEOs completed the survey. Results of this and all previous surveys are available at brt.org/resources/ceo-survey.

Past Surveys

2018 Q1 Q2 Q3 2017 Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2015 Q1 Q2 Q3 Q4 2014 Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4 2011 Q1 Q2 Q3 Q4 2010 Q1 Q2 Q3 Q4 2009 Q1 Q2 Q3 Q4 2008 Q1 Q2 Q3 Q4 2007 Q1 Q2 Q3 Q4