Business Roundtable: U.S. Economy Remains Strong, But CEO Economic Outlook Dips in Q3
CEOs Cite Proposed Corporate Tax Increases Among Top Threats to Investment, Hiring and Growth Plans
Washington – Business Roundtable today released its Q3 2021 CEO Economic Outlook Survey, a composite index of CEO plans for capital spending and employment and expectations for sales over the next six months. This quarter, the overall index dipped slightly, driven by a decline in expectations for sales. The headline index and three subindices remain well above their historical averages. In addition, answers to a special question revealed CEOs are cautious of current public health and economic conditions and federal policy changes that could put U.S. competitiveness at risk, including the corporate tax increases proposed in current reconciliation legislation.
The overall CEO Economic Outlook Index decreased in the third quarter to a value of 114, down 2 points from Q2 2021. The three subindices were as follows:
• Plans for hiring increased 5 points to a value of 108.
• Plans for capital investment increased 2 points to a value of 108.
• Expectations for sales decreased 14 points to a value of 126.
In their fourth estimate of 2021 U.S. GDP growth, CEOs project 4.8 percent growth for the year, a 0.2 percentage point decrease from their estimate last quarter.
When asked to identify the most significant impediments or threats to their company’s U.S. investment, hiring and growth plans over the next year, CEOs cited continued difficulty finding and retaining qualified workers, adverse changes to U.S. corporate tax policy and slow progress in global vaccinations as their main concerns.
“Investment in our nation’s infrastructure is urgently needed,” said Business Roundtable Chairman Doug McMillon, President & CEO of Walmart. “We applaud Congress for scheduling a vote on the bipartisan Infrastructure Investment and Jobs Act this coming Thursday. We urge every member of the House of Representatives to vote yes on this once-in-a-generation opportunity to generate significant investment in America’s transportation, water, energy and communications systems.”
“Increasing taxes on America’s largest job creators by almost $1 trillion—nearly three times the net corporate tax cut from 2017 tax reform—would be one of the largest corporate tax increases in history,” said Business Roundtable President & CEO Joshua Bolten. “Tax increases on job creators would make it harder for U.S. companies to compete and would hinder investment in America. The country needs businesses to invest in workers, innovation and operations to strengthen the U.S. economy, not new taxes that would weaken it. We urge policymakers to reverse course.”
Business Roundtable recently launched “Recover. Compete. Win,” a multi-million-dollar campaign focused on ensuring that the U.S. tax system remains competitive. The campaign includes direct CEO engagement to Capitol Hill and the Administration, as well as high-frequency radio print and digital ads in over 50 media markets across the country, generating calls and letters from constituents in target states. The campaign also includes TV ads that will be running inside the beltway.