CEOs in new survey slightly more optimistic about economy

CEOs are slightly more optimistic about the future of the U.S. economy despite ongoing inflation, according to the results of a new survey released Wednesday. 

Business Roundtable’s quarterly CEO Economic Outlook Survey for the first quarter of 2023 showed that its index rose six points to 79, the first increase since the last quarter of 2021. 

The survey asks the top CEOs in the country about their expectations for sales and plans for capital spending and hiring in the next six months to determine a future picture of the U.S. economy. Business Roundtable, an association of CEOs for the country’s most prominent countries, uses the data it collects to create an Economic Outlook Index and sub-indices for sales, capital expenditures and hirings. 

The indices can range from –50 to 150, with a rating at or above 50 indicating potential economic expansion and a rating below 50 signaling economic contraction. 

Business Roundtable reported that the first quarter of 2023 was the third consecutive one with the main index at or below the long-run average of 84 and above the threshold of 50, dividing between an expansion and a contraction. 

The association noted that the survey was conducted before the recent crashes of Silicon Valley Bank and Signature Bank and the resulting anxiety in financial markets. 

The results from the 141 CEOs who took the survey showed that they overall expect to see 1.4 percent economic growth for the year. But 71 percent also said they are very or moderately concerned about the trajectory of the national debt. 

“This quarter’s survey reflects continued caution resulting from high inflation and the policy measures the Federal Reserve is implementing to bring it under control,” General Motors chair and CEO Mary Barra, who also serves as the chair of Business Roundtable, said in a statement. “Business leaders look forward to working with policymakers to promote policies that stimulate growth, investment and expanded opportunity across the country.” 

The Federal Reserve has been aggressive in raising interest rates to try to lower inflation from its peak above 9 percent to under its target of 2 percent. But inflation has persisted despite falling consistently. 

Inflation declined to 6 percent over the past year last month, the lowest since September 2021 but much higher than the Fed’s goal. Still, the U.S. economy has consistently expanded the job market and kept the unemployment rate under 4 percent. 

The survey showed the index for hiring plans increased four points to 65, for capital investment dropped one point to 67 and for sales expectations rose 13 points to 104.