Latest news with #CEOEconomicOutlookIndex
Business Insider
7 hours ago
- Business
- Business Insider
CEOs haven't felt this gloomy about the economy since the pandemic
The Business Roundtable CEO index dropped 15 points in the second quarter, its lowest since 2020. The decline was driven by plans for reduced spending, sales expectations, and employment. CEOs cited trade policy uncertainty as the driving reason behind a declining index. CEOs aren't feeling too hot about the economy. The Business Roundtable's CEO Economic Outlook Index dropped by 15 points in the second quarter to 69, marking its lowest level since 2020 and well below its historic average of 83. A total of 169 CEOs participated in the survey, which was conducted between June 2 and June 13. "The quarter's survey results signal that Business Roundtable CEOs are approaching the next six months with caution," Cisco CEO and Business Roundtable chair Chuck Robbins said in a release accompanying the results. The survey assesses three categories: capital spending plans, hiring intentions, and sales expectations. Hiring plans saw the steepest decline this quarter, dropping 19 points. Capital investment plans followed with a 15-point decrease, and sales expectations fell by 11 points. The survey indicates that 41% of CEOs surveyed expect their company to decrease employment in the next six months, compared to 29% last quarter. The percentage of CEOs surveyed who expected hiring to increase in the next six months also dropped quarter over quarter, from 33% to 26%. It's the latest indication of a challenging job market, as many companies have made moves to flatten their org charts and slow hiring. A number of major companies have conducted layoffs this year, including Meta, Microsoft, BlackRock, and Intel. Other companies, like Salesforce, have announced a pause on hiring engineers. Business Roundtable CEO Joshua Bolten said the quarterly decline was driven by "broad-based uncertainty," stemming from an "unpredictable trade policy environment." The CEO said expanding tax reform is important but will not solve the issue on its own. "American businesses also need the Administration rapidly to secure deals with our trading partners that open markets, remove harmful tariffs and provide certainty for investment," Bolten said. President Donald Trump's tariff threats have taken consumers and businesses on a roller coaster ride over the last few months. While some tariffs were enacted in April, the bulk of new tariffs have been paused until July to allow time for negotiations. The ups and downs have resulted in sharp stock market swings, led some companies to make tweaks to their supply chains, and impacted retail and food service sales as well as the outlook on home sales. Uncertainty around tariffs has made long-term planning difficult for many companies. The Federal Reserve's Beige Book, released this month, indicated that half of the districts saw "slight to moderate" declines in economic activity, while three reported no growth at all. The Trump administration has said that tariff policies are in the best interest of the US, even if they create some short-term pain. While the report paints a largely gloomy picture of CEO sentiment, it's not at levels previously seen during the last recession. The Business Roundtable states that "readings at 50 or above indicate economic expansion," while readings below indicate a recession. In the second quarter of 2020, the economic outlook plummeted to an overall Index of 34.3, and quickly rebounded to 64 in the next quarter. However, the survey adds to a growing chorus of CEOs who are voicing concern for the near future as they navigate a choppy economic environment.
Axios
10 hours ago
- Business
- Axios
Exclusive: CEO economic outlook sinks to five-year low
Economic sentiment among America's top CEOs plunged to the lowest level since 2020, according to a new survey by the Business Roundtable, first seen by Axios. Why it matters: Chief executives have not been this sour on the economy since the once-in-a-century pandemic, with significant downgrading expectations for hiring, investment and sales growth. By the numbers: The Business Roundtable's CEO Economic Outlook Index fell by 15 points to 69, a drop that brings the index well below its historical average of 83. It remains above the level that signals an economic recession. The index decline is a result of tepid expectations for the months ahead, most notably on the hiring front. The employment subindex plummeted by almost 19 points, with more than 40% of CEOs expecting to shrink their workforces in the next six months — up from the roughly 30% who said the same last quarter. A subindex for capital expenditures — investment in new buildings, equipment, technology and more — fell roughly 15 points, with fewer executives planning to increase spending. That came alongside a more than 10-point drop in sales expectations, with a smaller cohort of CEOs expecting higher revenues. What they're saying: "Driving this quarter's decline in the Index is broad-based uncertainty, arising substantially from an unpredictable trade policy environment," Joshua Bolten, the Business Roundtable's CEO, said in a release seen by Axios. "Extending and enhancing tax reform is critical, but it is not sufficient. American businesses also need the Administration rapidly to secure deals with our trading partners that open markets, remove harmful tariffs and provide certainty for investment," Bolten said. The group surveyed 169 of its members in the first two weeks of June, when the U.S.-China trade truce was at risk of breaking down, before top Trump officials met with their Chinese counterparts. Flashback: CEOs had economic euphoria in the early years of Trump's first term, largely on the back tax cut expectations. In the comparable period in 2017, the CEO Economic Outlook Index hit a multiyear high. One year later, it was coming off the highest level ever. The bottom line: That's no longer the case. Uncertainty about trade and other policies is weighing on the CEO class, which has generally been hesitant to publicly criticize the Trump White House — and trumping any excitement about the prospect of extended tax cuts.
