U.S. CEOs not optimistic

If looking for good news about the future of the national economy, look away.

The majority of CEOs participating in a survey conducted by The Business Roundtable expect lower sales, reduced capital expenditures and lower employment growth in the next six months.

The Business Roundtable is an association of CEOs of corporations, representing a combined workforce of nearly 10 million employees and more than $5 trillion in annual revenues.

Also, the CEO Economic Outlook Index contracted to -5.0 in the first quarter of 2009, down from the 16.5 index in the fourth quarter of 2008. (An index of 50 or lower is a sign of economic contraction, while an index higher than 50 reflects economic expansion.)

Findings of the survey include:
• 67% of CEOs expect their company sales to decrease in the next six months, with just 24% expecting an increase.
• 66% expect their capital expenditures to decline in the next six months, with only 9% expecting an increase.
• 71% expect their company’s employment to decline in the next six months, with 7% expecting an employment gain.

“Improving consumer confidence and demand, both in the United States and abroad, is the key to jump-starting the economy,” said Harold McGraw III, Chairman of Business Roundtable and Chairman, President and CEO of The McGraw-Hill Companies. “Fortunately, both U.S. and foreign governments have recognized this need and taken significant steps to spark demand.”

In terms of the overall U.S. economy, member CEOs estimate real GDP will decline by 1.9% in 2009, down from the CEOs’ 0% estimate in the fourth quarter of 2008.