Economic outlook survey reveals that CEOs expect increased employment and sales

Source: Business Roundtable

Aug 04, 2010

The CEOs of America’s leading companies anticipate increased sales and employment in the next six months and expect capital spending to remain even, according to the results of Business Roundtable’s second quarter 2010 CEO Economic Outlook Survey.

“Our member CEOs plan to continue hiring and expect improved sales,” said Ivan G. Seidenberg, Chairman of Business Roundtable and Chairman and CEO of Verizon Communications. “That said, our CEOs are demonstrating some caution in the area of capital expenditures, with fewer planning to increase spending and more keeping it level.”

Survey Results

The survey’s key findings from this quarter and the first quarter of 2010 include:

  2010 Q2 2010 Q1
  Increase No Change Decrease Increase No Change Decrease
How do you expect your company’s sales to change in the next six months? 79% 17% 4% 73% 23% 5%
How do you expect your company’s U.S. capital spending to change in the next six months? 43% 50% 7% 47% 46% 7%
How do you expect your company’s U.S. employment to change in the next six months? 39% 43% 17% 29% 50% 21%


In particular, the CEOs anticipate capital spending to level over the next six months:

Expected U.S. capital spending over the next six months

Expected U.S. capital spending over the next six months

 

In terms of the overall U.S. economy, member CEOs estimate real GDP will grow by 2.7% in 2010.

Second quarter 2010 CEO Economic Outlook Survey Index

The Business Roundtable CEO Economic Outlook Survey Index expanded to 94.6 in the second quarter of 2010, up from 88.9 in the first quarter of 2010.

CEO Economic Outlook Survey Index

CEO Economic Outlook Survey Index


CEO outlook compared to actual GDP growth

According to an independent study, the CEO Economic Outlook Survey Index has predictive power for forecasting GDP growth, both in the quarter during which the survey is released (as illustrated in the chart below) and over the next two quarters.

The CEO Economic Outlook Survey Index and current quarter GDP growth

The CEO Economic Outlook Survey Index and current quarter GDP growth
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