U.S. CEOs see more growth ahead for the country’s economy but their optimism is tempered by uncertainty and the expected negative effects of the Trump administration’s trade policies.

The Business Roundtable CEO Economic Outlook Index for the third quarter of 2018 published Monday morning is down 1.8 points from 111.1 in the second quarter’s index to 109.3. The Business Roundtable includes CEOs of U.S. companies with more than 16 million employees and more than $7 trillion in annual revenues.

The third-quarter decline marks a second consecutive decrease since the index reached an all-time high of 118.6 in the first quarter of the year.

JPMorgan Chase CEO Jamie Dimon, also chair and CEO of the Business Roundtable, said:

Business leaders are showing their confidence in the U.S. economy with strong plans for investment and hiring in the months to come. Pro-growth policies have helped unleash this confidence with an agenda centered on tax reform and smart regulation. The uncertainty around our trade policies remains a risk. Now is the time to build on this momentum with trade policies that bolster U.S. competitiveness, encourage business investment and expand opportunities for American workers and families.

Roundtable president and CEO Joshua Bolton added:

This survey shows how tax reform and regulatory relief continue to bring strength to the economy. Yet, current trade policies and uncertainty about future trade policies are having negative effects, especially on capital investment. Decreases in capital investment not only impact the operations of Business Roundtable companies, less spending on equipment and facilities also squeezes small- and medium-sized suppliers and the millions of Americans they employ.

Business Roundtable urges the Administration to expand trade and investment – not introduce new barriers and uncertainties – as it negotiates with China and works to deliver a modern, trilateral NAFTA for the American people.

On a special survey question related to the effect of U.S. trade policy on capital investment, nearly two-thirds of CEOs said U.S. policy will have a moderate or significant negative effect on the capital investment decisions over the next six months.

Among the data points reported in second-quarter outlook are these:

• 87% of CEOs expect sales to rise, up from 84% in the first quarter; 4% expect sales to decrease, unchanged from the first quarter.
• 55% expect capital spending to rise, down from 61%; 2% expect capital spending to decrease, down from 4%.
• 56% expect employment levels to rise, down from 58%; 13% expect employment levels to fall, unchanged quarter over quarter.

The Business Roundtable CEO Economic Outlook Survey for Q3 is available at the organization’s website.

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