Top U.S. chief executives slightly downgraded their economic growth forecast and fewer said they expected to increase investments in their businesses amid uncertainty over whether Congress will reinstate some key corporate tax provisions, according to a survey released Tuesday.
FOR THE RECORD
The index rose because of improvement in CEO expectations for increased sales and hiring over the next six months.
About 44% of chief executives said they expected to increase such spending over the next six months. In the first-quarter survey, 48% said they expected to increase investment.
The decline was driven by the expiration on Dec. 31 of some temporary tax provisions, such as a 50% bonus on depreciation write-downs and a tax credit for research and development costs.
Congress is expected to extend those measures retroactively, but has not acted yet.
After the economy contracted in the first quarter, CEOs reduced their forecast for annual growth this year to 2.3% from 2.4% in the previous survey.
The downgrade came after the International Monetary Fund on Monday reduced its U.S. growth projection to 2% this year from an April forecast of 2.8%.
"CEO expectations for both investment and growth remain well below the potential of the U.S. economy and below what we should be experiencing at this stage of a recovery," Stephenson said.