Only six months ago, the economic outlook from the nation’s CEOs reached an all-time high.
But the latest Business Roundtable quarterly survey of America’s top business leaders finds optimism has continued to plummet amid concerns over what the next six months may hold for the U.S. economy.
“The softening of quarterly CEO sentiment reflects uncertainty driven by the unprecedented times we face as a nation and global community,” Business Roundtable Chair Mary Barra, General Motors (GM) CEO, said in a statement.
The group surveys its CEO members each quarter with the goal of gauging expectations for the next six months. This edition of the survey, conducted between May 16 and June 3, features 177 CEOs.
The overall rating came in at 96, down significantly from the peak of 124 last November. The roundtable says the 19-point drop since March is the sixth largest quarterly decline since the index began in 2002.
Even with the drop, the level of optimism remains above the index’s recent low of 34, recorded soon after the coronavirus pandemic swept the globe in early 2020. The rating also remains above the long-run average of 84 and above what the group considers the “expansion or contraction threshold of 50.”
The index found that over the last quarter plans for hiring decreased 23 points, plans for capital investment decreased 20 points, and expectations for sales decreased 14 points.
The survey also found that 56% of CEOs experienced setbacks due to the ongoing semiconductor shortage. But among the most impacted sectors — machinery; metals and minerals; chemical and plastic products; motor vehicles; and electronics — over 90% of CEOs reported impacts from the chip shortage.
‘We have seen some slowdown in consumer’
It’s not news that certain CEOs have grown more pessimistic about the future. Still, members of the Business Roundtable recently appeared on Yahoo Finance and expressed some optimism.
Hewlett Packard (HPQ) CEO Enrique Lores spoke with Yahoo Finance’s Brian Sozzi on June 1 to tout the company’s consistency in the current climate.
“We have seen some slowdown in consumer — but nothing that tells us that there is going to be a major slowdown coming forward,” he said.
Cisco (CSCO) CEO Chuck Robbins, another Business Roundtable member, added in a separate interview in May that he thinks sentiment has been too negative.
“If you think back over the last several years, the challenges that we’ve all dealt with as a global society, we should have confidence that we’re going to deal with whatever comes our way,” he said. “I don’t want to see us talk ourselves into a recession.”
‘We urge the Biden Administration to double down on domestic energy investment’
The DC-based Business Roundtable is composed of CEOs from hundreds of the nation’s largest companies with a stated mission to “promote a thriving U.S. economy and expanded opportunity for all Americans through sound public policy.”
“We urge the Biden Administration to double down on domestic energy investment and take additional action to address the elevated risk of a worsening global energy crisis,” Business Roundtable CEO Josh Bolten said in a statement. “We also call on the administration to lower tariffs.”
On the tariff question at least, President Joe Biden himself is reportedly leaning towards easing some tariffs on China with an announcement that could come as soon as this month.
Barra also called on Congress on Tuesday to pass a slowly advancing bill to provide over $50 billion to boost U.S. semiconductor manufacturing. Commerce Secretary Gina Raimondo recently warned that chip makers could flee the U.S. in “months” unless Congress acts on that front.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
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