CEOs more pessimistic on sales and hiring, Business Roundtable says
WASHINGTON -- The American economy just can’t seem to catch a break.
Now that the housing market is reviving and consumer optimism is edging higher, business investments and confidence among America’s leading corporate bosses appear to be waning.
In its third-quarter survey released Wednesday, the Business Roundtable said chief executives of its member companies are decidedly more pessimistic about near-term sales, capital spending and hiring than they were three months earlier.
In fact, the composite index of CEO expectations fell to its lowest level since the third quarter of 2009.
Jim McNerney, Boeing Co.’s chief and chair of the Business Roundtable, blamed the weakening sentiment on continuing concerns about the recovery – and in particular uncertainty over the looming “fiscal cliff,” higher federal taxes and spending cuts scheduled for next year. Rising energy prices and the still-unsettled affairs in Europe aren’t helping matters, either.
Many big businesses are still raking in handsome profits and have the capacity to plow a lot more into investments and hiring. But will they? Nearly six out of 10 surveyed still said they expect sales to grow in the next six months, though that’s down from 75% in the second quarter.
More worrisome for the job market, just 29% of these CEOs see their company’s employment increasing in the next six months, while 34% are expecting a decrease. Three months earlier, it was the other way around: 36% were looking for an increase in staffing and only 20% were forecasting a drop. (The rest saw no change.)
The Business Roundtable’s members include the largest companies in the country, which have done a whole lot better than small businesses in this recovery. Although small firms have typically fueled job growth in recoveries, many of them have been sidelined by the devastating recession and its lingering effects – which makes the big players all the more important for hiring.
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