Business Roundtable Q3 CEO Economic Outlook Index Signals Continued U.S. Slowdown
CEO Plans and Expectations Continue to Soften Amid Domestic, Global Economic Headwinds
Washington – Business Roundtable today released its Q3 2022 CEO Economic Outlook Survey, a composite index of CEO plans for capital spending and employment and expectations for sales over the next six months. The overall Index declined 12 points from last quarter to 84, its long-run average and well above the expansion or contraction threshold of 50.
The three subindices were as follows:
- Plans for hiring decreased 11 points to a value of 78.
- Plans for capital investment decreased 11 points to a value of 75.
- Expectations for sales decreased 12 points to a value of 99.
This quarter’s decline reflects a continued reduction in CEO expectations and plans for the next six months. The results are consistent with domestic economic conditions, including high inflation and higher interest rates, and persistent global headwinds from the war in Ukraine, including elevated global energy prices and the unfolding energy crisis in Europe.
To strengthen the U.S. economy amid such uncertainty, Business Roundtable urges policymakers to enact policies to ensure long-term economic growth and competitiveness. In the immediate term, Congress and the Administration can enact bipartisan permitting reform legislation to expedite energy infrastructure projects that will help achieve U.S. climate and energy goals and create American jobs. In addition, the Roundtable is calling on Congress to restore full and immediate expensing for R&D investments to support American innovation leadership, and on the Administration to bring down energy costs by promoting increased domestic energy production.
Business Roundtable Chair Mary Barra, Chair and CEO of General Motors, said: “Global economic uncertainty continues to temper CEO sentiment for domestic plans and expectations, as reflected in this quarter’s survey results. In the face of ongoing economic and geopolitical challenges, U.S. policymakers should pursue pro-growth policies that will strengthen the economy and generate upward mobility for all Americans. We must remain steadfast in putting in place the building blocks for future economic growth.”
Business Roundtable Smart Regulation Committee Chair Lynn Good, Chair, President and Chief Executive Officer of Duke Energy Corporation, said: “Investments in critical infrastructure across all industries are more important than ever to position America for a bright future. These investments will create millions of jobs and generate tax revenue that support schools, first responders and other essential services. However, these investments require permits to get shovels in the ground, and the nation’s current permitting process hinders the ability to unleash private capital for the nation’s infrastructure. We urge Congress to pass meaningful bipartisan permitting reform legislation this year to enable significant capital investments in affordable, reliable and increasingly clean infrastructure over the next decade.”
Business Roundtable CEO Joshua Bolten said: “As the Fed works to tame inflation in the short term, Congress and the Administration can take additional actions now to ensure long-term economic growth. In addition to permitting reform, we urge Congress to restore full and immediate R&D expensing, which supports innovation in America and helps U.S. businesses and workers compete globally. We also urge the Administration to strengthen the economy and bring down energy costs by putting in place the tools to increase domestic energy production, including offering federal lands for oil and gas leasing. To help ensure the strongest economic recovery possible, it is equally important for policymakers to avoid actions that increase inflationary pressures and run counter to the Fed’s actions.”
In their fourth estimate of 2022 U.S. real GDP growth, CEOs projected 2.3% growth for the year.