Optimism among chief executive officers of large U.S. companies rose to the highest in almost six years, as the outlook for capital spending improved, a Business Roundtable survey showed on Dec. 5.
The Index advanced to 96.8, highest since 1Q 2012 when it was 94.5.
The gauge of capital spending plans in the next six months increased to 92.7, topping the highest since 2Q 2011, from 86.4. And the sales outlook rose to 122 from 116.9.
Looking at hiring, expectations fell by 4.5 points to 75.7.
The latest quarterly report on the Washington-based group’s index extends a run of strong readings since Donald Trump was elected president last year, with his administration and congressional Republicans supporting an agenda of deregulation. Trump and GOP lawmakers are moving to enact a tax-cut plan that aims to spur growth to 3% annually, though many analysts expect an economic boost to be modest.
While sales expectations improved in the survey, the gain in the capital spending subindex reflects an increase in respondents who expect no change in U.S. investment and fewer CEOs projecting a decline. In addition, the share who expect their company’s U.S. employment to decline in the next six months rose to 18% from 13%, while the proportion projecting an increase held at 43%.
CEOs project U.S. economic growth of 2.5% for 2018 higher than a 3Q survey which showed 2.1% forecast for 2017.
In an annual special question about greatest cost pressure facing their company, 31% said labor; 26% said regulatory; 15% said materials and 13% said health care.
“The U.S. economy is strong, and business leaders are increasingly confident in continued economic growth, confidence that “rests on the pro-growth economic agenda of policymakers,” said JPMorgan Chase & Co. CEO Jamie Dimon -- who serves as chairman of the Business Roundtable. “To continue this momentum, it is critical that we enact pro-growth tax reform that will level the playing field for U.S. business to be globally competitive.”
By Shobhana Chandra