Last Updated:November 27 @ 11:19 am

Fewer CEOs planning to expand, hire

By Christopher S. Rugaber

WASHINGTON (AP) - A survey of U.S. chief executives shows a sharp drop in the number of large companies that plan to add jobs or hire more workers.

The Business Roundtable said Wednesday that only 29 percent of its member CEOs plan to increase hiring over the next six months. That's down from 36 percent in June, when the group last released its quarterly survey. It's also much lower than the 52 percent of CEOs in early 2011 who said they planned to boost hiring, the highest percentage since the survey began in 2002.

Jim McNerney, chairman of the Roundtable and CEO of The Boeing Co., said CEOs are worried about the impact of budget cuts and tax increases that are set to take effect at the start of next year. The pending U.S. budget changes are known as the "fiscal cliff." Chief executives are also concerned about economic slowdowns in Europe and China.

The cliff "certainly throws cold water on long-term business planning," he said in a conference call with reporters.

Only 30 percent of CEOs expect to increase their investment in capital goods such as machinery, computers or other equipment. Companies usually buy such goods when they are expanding. That's down sharply from 43 percent three months ago.

Large-company CEOs are more pessimistic about their future sales and the overall U.S. economy, the survey found. While 58 percent expect their sales to increase over the next six months, that's down from 75 percent in the June report. And the CEOs forecast the economy will expand just 1.9 percent this year, below their 2.1 percent forecast three months earlier.

McNerney said that when companies expect growth below 2 percent, "you're not adding jobs." Instead, they will simply push their work forces to be more productive, he said.

The Roundtable's overall CEO Outlook index fell to 66, the lowest since the third quarter of 2009, when the economy was just emerging from recession. Any reading above 50 suggests the economy is expanding.

Still, the negative impact of the fiscal cliff could be offset after the presidential election if Congress postponed the cuts and tax increases and agreed on a longer-term framework for reducing the deficit, McNerney said.

The downbeat view among chief executives is in contrast with a report Tuesday showing that consumers are more optimistic. The Conference Board's Consumer Confidence Index rose in September to its highest level in seven months. Rising home values and stock prices have boosted Americans' confidence that the economy will improve in the coming months. More people even expected hiring to pick up.

The Business Roundtable represents the CEOs of the 200 largest U.S. corporations. The survey results are based on 138 responses received between Aug. 30 and Sept. 14.

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1 Comment

  1. inluminatuoComment by inluminatuo
    September 27, 2012 @ 8:33 am

    What small private business man in his right mind would expand his business for the priviege of handing 35% over to a government of failed social experimentation. People with the ability to read a profit and loss statement and a balance sheet understand that the ticking time bomb of our National debt clock will call economic game over when interest rates on our $16 trillion in national debt rise from unhistorical current lows of 1.5% back to the 5-6% range and the interest the taxpayers have to pay jumps from current $240 billion a year to one trillion a year in interest paid to China and the middle east masters our Tax Spend and borrow Democrat Debt leaders have enslaved us to. Smart businessment are using what capital they have to pay off debt and hunker down for the coming Liberal government induced economic disaster that always follows the redistribution of honest wealth into the hands of the dishonest people and their elcted dishonest politicians who never earned it. Just think of all the social programs that COULD HAVE succeeded with the trillion/yr in interest we will have to pay to sustain the illusion of Progressive prosperity??? Another opportunity lost to the power grabbers who only had THEIR interests at heart and whose collective of failures view the people as government servants instead of the government as the servants of the people.

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