Business Roundtable CEO Economic Outlook Index Declines Further in Q4
CEOs Call on Congress, Biden Administration to Enact Policies to Spur U.S. Economic Growth, Strengthen Competitiveness
Washington – Business Roundtable today released its Q4 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 11 points from last quarter to 73, which is the first time it has dipped below its long-run average of 84 since Q3 2020. The Index remains above the expansion or contraction threshold of 50.
The three subindices were as follows:
- Plans for hiring decreased 17 points to a value of 61.
- Plans for capital investment decreased 7 points to a value of 68.
- Expectations for sales decreased 8 points to a value of 91.
This quarter’s results reflect a softening economy that has tempered CEO plans and expectations for the next six months. The results signal CEOs remain cautious amid persistent domestic and global economic headwinds, including high inflation and the Fed measures required to tame it.
In addition to action by the Fed, Business Roundtable believes policymakers have an important role to play in positioning the U.S. economy for sustained growth. The Roundtable is calling on Congress and the Administration to pursue policies that will spur growth and strengthen America’s long-term competitiveness, including restoration of full and immediate expensing for research and development (R&D) and energy permitting reform.
Business Roundtable Chair Mary Barra, Chair and CEO of General Motors, said: “With continued supply chain challenges and inflation uncertainty, many CEOs remain cautious about domestic plans and expectations for the next six months. We urge U.S. policymakers to position America for the strongest economic recovery possible. Sound policy action in the short term will yield long-term economic benefits and lay a solid foundation for our growth and competitiveness.”
Business Roundtable CEO Joshua Bolten said: “The Fed has been pumping the brakes to rein in inflation, and the survey results are unsurprising in that context. To strengthen the economy, Business Roundtable urges Congress and the Administration to undertake pro-growth policies, including restoring full and immediate expensing of American R&D investments this session and reforming the permitting system to expedite energy infrastructure projects. Given the uncertainty facing the economy, we also urge Congress to address the debt ceiling as soon as possible.”
In their first estimate of 2023 U.S. GDP growth, CEOs projected 1.2% growth for the year. CEOs were also asked to identify the greatest cost pressure facing their company, a question posed every fourth quarter since 2003. Forty-nine percent of Business Roundtable CEOs identified labor costs as the top cost pressure, followed by 15% who identified material costs and 14% who identified supply chain disruption costs. Other top cost pressures included energy and regulatory costs.
