Published: March 07, 2007
Washington, DC – Business Roundtable's first quarter 2007 CEO Economic Outlook Survey shows that leaders of America's top companies continue to see the U.S. economy in a stable growth position moving forward, with conditions generally favorable for business expansion. The CEO Economic Outlook Index, which indicates how CEOs believe the economy will perform in the six months ahead, rose slightly to 84.9, a three-point increase from the last survey in the fourth quarter of 2006.
Business Roundtable is an association of chief executive officers of leading corporations with a combined workforce of more than 10 million employees and $4.5 trillion in annual revenues.
"This survey shows that CEOs believe the economy is growing at a comfortable pace," said Harold McGraw III, Chairman of Business Roundtable and Chairman, President and CEO of The McGraw-Hill Companies. "The projections for sales, capital spending and employment all point to steady growth with no significant acceleration or slowing over the next six months."
The survey's key findings for the next six months include:
On overall economic growth, CEOs are assuming 2.9 percent GDP growth in 2007, a view in line with the latest forecast by the President's Council of Economic Advisers, and slightly more optimistic than the consensus view of private economists who project a range of 2.3 percent to 2.8 percent.
The company projections resulted in a CEO Economic Outlook Index of 84.9, a modest increase from the 81.9 reading in the fourth quarter of 2006. The CEO Economic Outlook Index combines the responses on projected sales, capital spending and employment into an overall index that shows how the CEOs believe the U.S. economy will perform in the six months ahead. It is a diffusion index centered on 50, which means anything above 50 is expansion and anything below 50 is contraction.
This latest index value remains well above the 50-70 range observed in late 2002 and early 2003, as the economy recovered from the last recession.
"These survey results show that America's CEOs maintain the generally favorable view of economic conditions they've held over the past several quarters, with a stable employment outlook and slight increases in predictions for sales and capital spending over the next six months," concluded McGraw.
The Roundtable's CEO Economic Outlook Survey, which has been conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economic assumptions and outlooks of Roundtable companies.
The survey was completed between February 8 and 22 by 113 of the Roundtable's 160 member companies. The percentages in some categories may not add up to 100 because of rounding.
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Business Roundtable (www.businessroundtable.org) is an association of chief executive officers of leading U.S. companies with $4.5 trillion in annual revenues and more than 10 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and represent over 40 percent of all corporate income taxes paid. Collectively, they returned $112 billion in dividends to shareholders and the economy in 2005.
Roundtable companies give more than $7 billion a year in combined charitable contributions, representing nearly 60 percent of total corporate giving. They are technology innovation leaders, with $90 billion in annual research and development spending - nearly half of the total private R&D spending in the U.S.