The latest Business Roundtable’s CEO Economic Outlook Survey covers the second quarter of 2012, and as you may have guessed these CEOs are showing a downturn in their expectations for sales, capital spending and hiring for the next six months. With all of the slowing data from Asia and Latin America meeting the demise of the Eurozone it is not likely a surprise.
The Business Roundtable called it a slight downturn, but the direction is red on every metric. Some good news is that this is still a projection of at least very modest expansion as the majority of CEOs surveyed see slower overall economic growth for 2012 and have modestly lower expectations for sales, capital expenditures, and hiring from a quarter ago. Business Roundtable members estimate real GDP will grow by 2.1% in 2012, down slightly from last quarter’s estimate of 2.3%.
The dip in quarterly sentiment highlights increasingly persistent obstacles to a stronger recovery as well as the risks of the coming fiscal cliff over the coming year-end U.S. tax hikes and spending cuts. The outlook is also dampened by the Eurozone situation.
As far as the index, the new reading for Q2’s outlook is 89.1 versus 96.9 at the end of the first quarter. The survey was completed between May 17 and June 8 and responses were received from 78% of members that came to 164 CEOs.
JON C. OGG
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