Business Leaders Positive on Economy: Expectations for Sales, Hiring and Investment Make Sharp Rise

CEOs Stress Tax and Regulatory Reform to Promote Growth

CEO Economic Outlook Index (Photo: Business Wire)

WASHINGTON--()--CEOs’ plans for hiring and investment and expectations for sales over the next six months jumped sharply, according to the Business Roundtable first quarter 2017 CEO Economic Outlook Survey.

The Business Roundtable CEO Economic Outlook Index — a composite of CEO projections for sales and plans for capital spending and hiring over the next six months — made its largest increase since the fourth quarter of 2009.

The Index jumped 19.1 points, from 74.2 in the fourth quarter of last year to 93.3 in the current quarter. For the first time in seven quarters, the Index has risen above its historical average of 79.8. Its highest level over the past 10 years was 113, reached in Q1 2011.

CEO plans for hiring increased by 18 points from the previous quarter, while expectations for sales and capital expenditures increased by 21 and 18.4 points, respectively, over the previous quarter.

CEOs project 2.2 percent GDP growth in 2017, a 0.2 percent increase over their projection for 2017 made last December.

“I am enthusiastic about the opportunity to enact a meaningful pro growth agenda that will benefit all Americans. As these results confirm, business confidence and optimism have increased dramatically,” said Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan Chase & Co. and Chairman of Business Roundtable.

In a special question posed this quarter, 79 percent of the responding CEOs identified tax reform (52 percent) and regulatory reforms (27 percent) as the two best ways to create a positive environment for their company’s growth. Fifteen percent picked infrastructure investment as a third priority.

“Our CEOs are committed to working collaboratively with policymakers to drive policy solutions, starting with far-reaching tax reform and a smarter approach to regulation,” Dimon said.

Joshua Bolten, Business Roundtable President & CEO, added, “CEOs appear to be responding to early indications that the new Administration is serious about creating a better environment for job creation and investment in America.”

Survey Results

The survey’s key findings from this quarter and the fourth quarter of 2016 include:

       
CEO Survey Results & Sub-Indices 2016 Q4 2017 Q1 Quarter-Quarter Change in Sub-Index
Increase No Change Decrease Sub-Index Increase No Change Decrease Sub-Index

How do you expect your company’s sales to change in the next six months?

67% 19% 14% 102.8 78% 18% 4% 123.8 +21.0

How do you expect your company’s U.S. capital spending to change in the next six months?

35% 43% 21% 64.2 46% 40% 13% 82.6 +18.4

How do you expect your company’s U.S. employment to change in the next six months?

35% 35% 30% 55.6 41% 41% 18% 73.6 +18.0
 

First Quarter 2017 Business Roundtable CEO Economic Outlook Index

The Business Roundtable CEO Economic Outlook Index — a composite index of CEO plans for the next six months of sales, capital spending and employment — increased from 74.2 in the fourth quarter of 2016 to 93.3 in the first quarter of 2017. The long-term average of the Index is 79.8.

About the Business Roundtable CEO Economic Outlook Survey

The Business Roundtable CEO Economic Outlook Survey, conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economy by Business Roundtable member CEOs.

The survey is designed to provide a picture of the future direction of the U.S. economy by asking CEOs to report their plans for their company’s sales, capex and employment in the next six months. The data are used to create the Business Roundtable CEO Economic Outlook Index and sub-indices for sales, capex and hiring expectations. All of these indices are diffusion indices that range between -50 and 150 — where readings at 50 or above indicate an economic expansion, and readings below 50 indicate an economic contraction. A diffusion index is defined as the percentage of respondents who report that a measure will increase, minus the percentage who report that the measure will decrease.

The first quarter 2017 survey was conducted between February 8 and March 1, 2017. Responses were received from 141 member CEOs. The percentages in some categories may not equal 100 due to rounding. Results of this and all previous surveys are available at brt.org/resources/ceo-survey.

Business Roundtable CEO members lead companies with nearly 15 million employees and more than $6 trillion in annual revenues. The combined market capitalization of Business Roundtable member companies is the equivalent of nearly one-quarter of total U.S. stock market capitalization, and Business Roundtable members invest $103 billion annually in research and development – equal to 30 percent of U.S. private R&D spending. Our companies pay $226 billion in dividends to shareholders and generate $412 billion in revenues for small and medium-sized businesses annually. Business Roundtable companies also make more than $7 billion a year in charitable contributions. Learn more at BRT.org

Contacts

Business Roundtable
Betsy Andres Stewart, 202-496-3270

Contacts

Business Roundtable
Betsy Andres Stewart, 202-496-3270