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 Remains Strong


CEOs Identify Key Policy Priorities for Continued Economic Progress in 2019, Highlight Importance of Preserving Tax Reform and Removing Trade Barriers

Business Roundtable today released its Q4 2018 CEO Economic Outlook Index – a composite of CEO expectations for sales and plans for capital spending and hiring over the next six months. The Index remained at a historically high value, reflecting a strong CEO outlook for the U.S. economy. However, Q4 marks the third consecutive quarter in which the Index declined from the previous quarter, reinforcing the importance of removing barriers to trade, including tariffs, and continuing to advance domestic policies to stimulate hiring, capital investment and economic growth.

Declining 4.9 points from 109.3 in the third quarter of 2018, the Q4 2018 CEO Economic Outlook Index of 104.4 ranks among the top 10 percent of all readings in the survey’s 16-year history and is well above the historical average of 82.1. This is the eighth straight quarter where the Index has exceeded its historical average, signaling a continued positive direction for the U.S. economy.

While all the three components of the Index decreased in the fourth quarter, each sub-index showed strong CEO plans and expectations for the next six months:

  • CEO plans for hiring dipped 0.9 points to 91.7, which is the fourth-highest value for the employment sub-index in the Survey’s history. Notably, all four of the highest values occurred in 2018.
  • Plans for capital investment fell 5.3 points to 97.9, which ranks among the top 10 highest values for the capital spending sub-index in the Survey’s history.
  • Expectations for sales decreased 8.7 points to 123.6, which ranks historically in the top third of all readings of the sales sub-index.

In their first estimate of 2019 U.S. GDP growth, CEOs projected 2.7 percent growth for the year ahead.

Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan Chase & Co. and Chairman of Business Roundtable said, “The BRT CEO survey shows that confidence among America’s business leaders remains strong. Significant progress on tax reform and a smarter approach to regulation continues to help fuel historically high CEO plans for hiring and capital investment. Congress and the Administration should work to build on these gains in 2019 with bipartisan policies that further increase job creation and opportunity for more Americans and strengthens the country’s economic competitiveness.”
Joshua Bolten, Business Roundtable President & CEO, added, “The economic outlook of America’s business leaders is strong, but we know that more can be done to support sustained U.S. economic growth. Outdated infrastructure, barriers to trade and a broken immigration system all pose risks to America’s long-term economic vitality. Business Roundtable welcomes the opportunity to work with lawmakers on both sides of the aisle to tackle these important challenges. As CEOs made clear in this survey, accomplishing these goals will spur job creation, investment and economic opportunity here in the U.S.

In the Q4 Survey, CEOs were asked two special questions:

In the first special question, which is asked in every fourth quarter survey, CEOs identified the greatest cost pressure facing his or her company. In four of the last six years, regulatory costs were ranked highest by CEOs. In the Q4 2018 Survey, just 13 percent of CEOs selected regulatory costs as the greatest cost pressure, a drop of roughly two-thirds since Q4 of 2016 when 40 percent of CEOs provided this response. The top cost pressure CEOs identified in this Survey was labor costs (37 percent) followed by materials costs (20 percent), likely reflecting a tight U.S. labor market and higher costs from U.S. tariff increases.

The second special question asked CEOs to rate the benefit of various policies in promoting capital spending and hiring activity in 2019. The results showed that CEOs are in near consensus about the importance of continuing recent U.S. economic progress from tax reform and regulatory relief:

  • 92 percent see a strong or moderate benefit to capital spending and hiring from “maintaining the 21 percent corporate tax rate;”
  • 87 percent see a strong or moderate benefit from “further policies to lighten the regulatory burden on U.S. business activity;”

Additionally, an overwhelming majority of CEOs emphasized the benefits to capital spending and hiring from pursuing pro-growth policies on trade, infrastructure and immigration:

  • 82 percent see a strong or moderate benefit from “removing current and preventing future barriers to trade including tariffs;”
  • 81 percent see a strong or moderate benefit from “significant investments to modernize and build new U.S. infrastructure;” and
  • 68 percent see a strong or moderate benefit from “modernizing the U.S. immigration system, including expanding skills-based legal immigration.”

Survey Results

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

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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 company’s expectations for sales and plans for capital spending and hiring over 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 fourth quarter 2018 survey was conducted between November 6 and November 26, 2018. Overall, 141 CEOs completed the survey. 

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