CEOs Temper Business Plans for Capital Investment

According to the Business Roundtable Q2/15 CEO Economic Outlook Survey, CEOs have tempered business plans for capital investment and hiring, reflecting concerns about the continued sub-par growth trajectory of the U.S. economy.

The Business Roundtable CEO Economic Outlook Index – a composite of CEO projections for sales, and plans for capital spending and hiring over the next six months – declined from 90.8 in Q1/15 to 81.3 in Q2/15.

CEOs said that they expect sales, investment and hiring to decrease almost 10 points, 9.8 points and 8.9 points, respectively, in the next six months. And they expect GDP growth of 2.5% in 2015, 0.3 percentage point lower than last quarter. Importantly, the survey was conducted prior to the Commerce Department’s recently released Q1 GDP downward revision to negative 0.7%, a contraction of 0.9% from their advance estimate.

“Of particular concern is the downward movement of our CEOs’ investment plans. Business investment is a key driver of economic expansion and job growth,” said Randall Stephenson, chairman of Business Roundtable and chairman and CEO of AT&T.

Stephenson added, “To boost investment spending and strengthen the economy, it is critical that Congress and the Administration pass Trade Promotion Authority and tax reform.”

To view the full Business Roundtable CEO Economic Survey, click here.

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