BRT's CEO Survey estimates 2 percent GDP growth, hiring doubts
Business Roundtable today released its fourth quarter CEO Survey, showing a continuation of expected for sales, capital spending and hiring as reported in the third quarter survey. Expectations for hiring were slightly lower than the previous survey, and GDP growth in 2012 was estimated at 2 percent. Still, the survey's index of 77.9 -- up from 77.6 the previous quarter -- remained in positive territory.
In a telephone briefing with reporters, BRT Chairman Jim McNerney, Chairman, President and CEO of The Boeing Company, responded to a question about the CEO's slightly lower estimate of growth than recent reports. (For exampled, economists polled by Reuters predict a 2.9 percent annualized growth in the 4th quarter, falling to 2.1 percent for 2012.) He responded:
It’s important to keep in perspective that this index is in positive territory. The 77.9 does suggest expansion. I think the challenge – and this is also what’s reflected in the results – is that the economy is not yet moving fast enough to significantly create new jobs on a sustainable basis. In other words, we’re growing fast enough to absorb the productivity but not yet fast enough to drive employment as fast as we’d all like. It’s sort of a slow, slow recovery.
European exposure – whether you have business in Europe or not – is going to have an impact overall, because there is no way to delink some kind of a financial event in Europe from impacting business everywhere…. So it is a concern wherever you’re doing business.
While there have been some positive developments in Europe, I don’t think they’ve yet been solid enough to change an uncertain view of Europe. And I would say the same thing about the deficit-reduction efforts here in the United States. The Supercommittee was unable to reach a result, and so that uncertainty continues to be in front of us.
And one last comment: There’s sort of old-fashioned regular business pressures --- commodity prices, oil prices, challenges with health care costs. I think regulatory is a slightly higher concern amongst businesses, in that for many of our members the regulatory process is a little more costly and onerous than it has been historically. So that’s why that one's popping up.
So, slow, bumpy recovery that we all hope will strengthen.
BRT will post the full transcript tomorrow.
News coverage ...
- Associated Press, “CEOs of big companies foresee no pickup in hiring”
- Bloomberg, “Chief Executive Officers in US Project 2012 Growth of 2%”
- Los Angeles Times, “Top US CEOs still cautious about economic recovery”
- Reuters, “CEOs' view of economy little changed-Roundtable”