CEO Economic Outlook Index

The Business Roundtable CEO Economic Outlook Index is based on a survey — conducted quarterly since the fourth quarter of 2002 — of our member CEOs’ plans for hiring and capital spending, and their expectations for sales, over the next six months. Taking these factors together, the survey signals the direction of the U.S. economy.

Business Roundtable Releases Fourth Quarter 2008 CEO Economic Outlook Survey

CEOs forecast significant declines across sales, capital expenditures and employment

Washington, D.C. – The Business Roundtable CEO Economic Outlook Index — which reflects expected sales, capital expenditures and employment figures for the next six months — contracted to 16.5 in the fourth quarter of 2008, according to results released today; there was a consistent decrease in economic activity in all three categories.

"As economic conditions continue to soften, so have our member CEOs’ near-term expectations for sales, capital spending and employment,‖ said Harold McGraw III, Chairman of Business Roundtable and Chairman, President and CEO of The McGraw-Hill Companies. ―We are committed to working with the new administration and Congress to restore economic growth through bipartisan solutions to the complex challenges facing our workers and businesses."

Business Roundtable is an association of chief executive officers of leading corporations, representing a combined workforce of nearly 10 million employees and $5 trillion in annual revenues.

The survey’s key findings for the next six months include:

n terms of the overall U.S. economy, member CEOs estimate GDP growth for 2009 to be flat.

This quarter’s survey also asked member CEOs to address the impact the current credit challenges are having on their businesses and to identify their greatest cost pressures.

With regard to the credit markets, 56 percent of CEOs reported the current challenges have raised their borrowing costs. It is important to note that member companies are not all equally dependent on the credit markets; therefore, the dislocation has affected some more than others.

CEO Economic Outlook Index for Fourth Quarter 2008

With regard to cost pressures, CEOs identified material costs as having the greatest impact among a diverse range of pressures that include labor costs, health care expenditures, energy costs and litigation costs. In addition, CEOs for the first time ever listed pension costs as a major concern.

The following chart summarizes the responses to the question on cost pressures:

"Many of the cost pressures facing our member companies could be mitigated by implementing policies that have long been at the top of Business Roundtable’s agenda,‖ added Mr. McGraw. ―We look forward to sitting down with members of both political parties to work toward a meaningful reform of our health care system and a more efficient and sustainable energy future."

The Business Roundtable CEO Economic Outlook Index is a composite diffusion index that combines responses on projected sales, capital spending and employment to show how member CEOs believe the U.S. economy will perform in the six months ahead. The index is centered on 50, and results can range from negative 50 to positive 150. We believe an index reading of 50 or lower would be consistent with overall economic contraction and a reading of 50 or higher would be consistent with expansion.

Business Roundtable’s CEO Economic Outlook Index, conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economic assumptions and outlooks of Business Roundtable member CEOs.

CEO Economic Outlook Index for Fourth Quarter 2008

The survey was completed between November 3 and November 17. The percentages in some categories may not equal 100 due to rounding. Results of all surveys can be found at

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