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CEO survey paints brighter picture for ‘12
A growing number of chief executives at large U.S. companies say they are more optimistic about the economy and plan to step up hiring. The brighter view from the boardroom comes after the best three months of job growth in two years.
The Business Roundtable said Wednesday that a survey of its CEO members found that 42 percent expect to hire in the next six months. That's up from 35 percent three months ago.
Nearly half plan to spend more on machinery and other capital equipment and more than 80 percent expect their sales to rise.
The chief executives' overall outlook on the economy improved sharply from the end of last year. The group's outlook index jumped to 96.9 in the current January-March quarter. That's up from 77.9 in previous quarter and the highest reading since last spring.
The group is an association of the leaders of the 200 biggest U.S. companies.
The fourth-quarter survey's finding that only 35 percent of CEOs planned to add jobs was the lowest in five quarters. Yet the next three months saw the biggest job gains in two years.
The economy has added an average of 245,000 jobs per month since December. That has dropped the unemployment rate to 8.3 percent, the lowest in three years.
It suggests that most of the gains came from smaller companies, rather than the large corporations that make up the Roundtable's membership.
Research shows that small and, particularly, new businesses create most of the new jobs in the United States. Businesses with fewer than 500 employees account for about 65 percent of jobs created in the past 20 years.
The improvement in the CEO survey suggests the job gains "will continue," said Jim McNerney, chairman of the Roundtable and CEO of Boeing Co.
But plenty of concerns remain, he said. Europe's debt crisis could weigh on the U.S. recovery. Growth has slowed in China. And oil prices have spiked since the fall, driving gas prices back up to their highest level in nearly a year.
America's top business executives were nearly as confident in the economy last spring - before trouble with Europe's economy and elevated energy prices dimmed their outlook.
The index's current reading is the best since it was at 109.9 in the April-June quarter of 2011.
"There's hope in all our hearts that won't happen this time, but a lot of those headwinds are still there," said John Engler, president of the Roundtable and former governor of Michigan.
The CEOs also boosted their forecast for economic growth to 2.3 percent this year, up from a 2 percent projection four months ago. Mr. Engler, a Republican who served from 1991 to 2003, said that showed growth expectations are still modest. CEOs are "more optimistic, but we're not ready to have a parade," he said.
The survey is based on 128 responses received from March 1 to 19.
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