CEOs See Higher Sales Over Next 6 Months

Companies expect to increase employment as well as capital spending.

The CEOs of America's leading companies plan increases in employment, sales and capital expenditures over the next six months - according to the results of Business Roundtables fourth quarter 2010 CEO Economic Outlook Survey.

"Demand is returning as evidenced by anticipated sales increases, and that is good news. When demand increases, capital expenditures and employment follow -- which is what we expect to see in the next six months," said Ivan G. Seidenberg, Chairman of Business Roundtable and Chairman and CEO of Verizon Communications. "However, our CEOs expect GDP to grow at rate of only 2.5% in 2011, so there is still more work that needs to be done to get the economy back on the path toward strong, sustainable growth."

The surveys key findings from this quarter and the third quarter of 2010 include:

  • 80% expect sales to increase in the next six months
  • 59% will increase capital spending in the next six months
  • 45% will bring on new employees in the next six months

The survey also asked CEOs to identify their greatest cost pressures. Materials, health care and labor costs ranked among the top concerns. About one-third of CEOs named materials costs as having the greatest impact among a diverse range of pressures that include pension, litigation and energy expenditures.

"Copper prices and corn prices are at near record highs. Cotton prices and most metals prices are also very high," added Seidenberg. As a result of these marked increases, materials are being cited as the greatest cost pressure, with health care costs coming in next as a significant cost pressure."

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