Walmart Inc. CEO Doug McMillon, who is the chairman of the Business Roundtable, shakes hands with President Donald Trump during press conference on COVID-19 last March.
The CEOS of America’s biggest companies are much more upbeat about the prospects for the U.S. economy, according to a quarterly survey from the Business Roundtable released Monday.
The survey indicated executives expect their companies to hire more people and invest more in the next six months.
The index that measures CEOs’ outlook for the economy jumped 22.2 points to 86.2 in the fourth quarter from the prior three-month period. It’s the second straight sharp gain in the index, which rose 29.7 points in the third quarter. That was the first gain after nine quarters of decline.
The index now stands above its historic average although it is still well below the all-time high of 118.6 reached in the first quarter of 2018 after passage of President Trump’s tax cuts.
The business leaders expect the economy to grow at a 1.9% annual rate in 2021. That would be a welcome improvement from the negative growth rate this year resulting from the shutdown of the economy last March which triggered a steep recession. For 2020 as a whole, economists have penciled in a negative growth rate in the neighborhood of 3%.
Even below the surface, the Business Roundtable survey was strong. The sub-index for sales growth jumped 29.9 points to 116.4, while the sub-index for capital spending rose 25.2 points. The outlook for employment wasn’t as robust but increased 11.5 points to 58.1.
The pace of job growth slowed in November and economists are worried it will decelerate even more in December and January as COVID-19 cases skyrocket.
In a separate question, 40% of the top executives polled said labor is their biggest cost pressure.
The Roundtable represents large companies that employ some 15 million people and generate $7.5 trillion in annual revenue. The group has been doing its quarterly survey since 2002.
Source:- MarketWatch
