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CEOs now see gloomy third quarter, drop growth expectations
Question of the Day
“We can lead, but you can’t lead by not making decisions,” he said.
Business leaders also complained about what they said were heavy-handed and misguided regulations that have hurt growth and curbed the appetites of companies to hire and invest.
Fifty-eight percent of the CEOs who responded to the Business Roundtable survey expect sales to increase in the next six months, down from 75 percent last quarter, while the number of CEOs who expect a decline in sales nearly tripled to 15 percent, largely because of weaker demand in Europe and China.
Companies also are slowing capital spending and hiring because of uncertainties in the U.S. tax and regulatory environments. About 30 percent expect to increase spending over the next two quarters, down from 43 percent last quarter, while 19 percent plan to cut back on spending, up from 12 percent.
About 29 percent expect to boost hiring, down from 36 percent, while 34 percent expect to make layoffs or other declines in employment, up from 20 percent.
Meanwhile, the CFO Signals Survey found that 47 percent of chief financial officers are more pessimistic about the performances of their companies this quarter. The survey said the results are the “most somber year-over-year expectations” in the history of the study.
Respondents cited government policies, such as the federal government’s budget impasse, taxes and regulatory changes, as their biggest concerns.
In the NAM and NFIB poll, 55 percent of small-business owners and manufacturers say that, given the current economic climate, they would not start a business today. Two-thirds of respondents said they found it hard to expand their business or hire new workers, because of economic uncertainty.
Respondents said the government has been more of a “barrier rather than a help”: More than two-thirds blame regulatory policies for hurting small businesses and manufacturers, while 55 percent are concerned that the regulatory environment is getting worse.
Twenty-seven percent say the heavy regulatory environment could lead to companies moving overseas, rising consumer prices (24 percent) and job loss (23 percent).
On the other hand, these business leaders believe that emerging rivals such as China and India are better about supporting their small businesses and manufacturers. In fact, 62 percent say U.S. laws, regulations, rules, taxes and fees are harder to deal with than the burdens faced by foreign competitors.
“Manufacturers have told policymakers in Washington time and again that uncertainty and a negative business environment is turning the American Dream into a nightmare,” NAM President and CEO Jay Timmons said in a statement. “There is far too much uncertainty, too many burdensome regulations and too few policymakers willing to put aside their egos and fulfill their responsibilities to the American people.”
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About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at firstname.lastname@example.org.
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