CEO Survey Suggests Brighter U.S. Economic Outlook

Executives assuming 2008 growth of 2.1% in their business plans.

American business leaders expect generally positive conditions in the coming six months despite a variety of economic headwinds, a survey showed Dec. 4. The Business Roundtable's CEO Economic Outlook Index rose slightly to 79.5 in November, up from a 77.4 reading in a September poll.

Anything above 50 suggests economic expansion, and anything under 50 is a sign of economic contraction.

Chief executives surveyed said they were assuming 2008 economic growth of 2.1% in their business plans. "This quarter's survey suggests that CEOs, as a whole, still see the economy as steady and that the vast majority expect their sales, capital spending and employment levels to either increase or remain steady in the first half of 2008," said Harold McGraw, chairman of Business Roundtable and chairman and CEO of The McGraw-Hill Companies.

"While this quarter's index represents only a slight expansion, it confirms the CEOs' belief in the underlying strength of the economy, which has endured increased energy costs and credit concerns."

The survey, which polls about 100 chief executives on their outlook for the next six months, found some positive signs that sales and capital expenditures should increase in that time period. The survey found that 70% of the CEOs saw sales increasing into next year, while 17% said sales would stay the same and 13% forecast sales would decline.

Increased capital expenditures were foreseen by 35% of those polled, while 51% predicted the same level and 14% saw a decline.

Regarding employment, 33% of those asked saw increased employment, while 45% expected similar levels and 22% saw a decrease.

Copyright Agence France-Presse, 2007

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