The Business Roundtable, a national association of CEOs of some of the country’s leading corporations, released its Q3 Economic Outlook Survey today. Overall, CEO optimism is returning, though concerns remain.
Business Roundtable today released its Q3 2020 CEO Economic Outlook Survey, a composite index of CEO plans for capital spending and employment and expectations for sales over the next six months. This quarter the overall Index was 64.0, an increase of 29.7 points compared to Q2 2020. While this is the first quarterly increase in the headline index after nine consecutive quarters of decline, it remains below the historical average of 81.7.
The survey asked about expectations for the recovery.
In a special question asking when business conditions for their company will recover to pre-COVID levels, 24 percent of CEOs said that business conditions never declined, have recovered, or will likely recover by the end of the year. Forty percent said they expect business conditions to recover in 2021, and 36 percent said they expect business conditions to recover in 2022 or later.
The BR’s policy recommendations are consistent with the Opportunity Washington perspective.
…the index remaining far below its 18-year historical average indicates that CEO plans remain fragile and recovery requires more support to be sustained and accelerated. CEOs remain especially concerned about implications for small businesses.
With this is mind, Business Roundtable will continue to advocate for further action by policymakers to support the public health response to the pandemic, protect jobs, small businesses and livelihoods, and make additional investments in education and worker training, especially for minority families, communities and workers, as detailed in a July 21 letter to congressional leaders outlining measures needed in Phase 4 legislation.
As Congress and the White House remain unable to reach agreement on further pandemic relief, the BR position takes on new urgency.
“The outlook of Business Roundtable CEOs has improved, due in part to actions taken by policymakers earlier this year to help Americans,” said Joshua Bolten, President & CEO of Business Roundtable. “But further major support from the federal government is necessary to prevent economic recovery from being derailed. Failure to act, along with the lack of comprehensive and coordinated efforts to stop the spread of COVID-19, would impose long term damage on the U.S. economy, hurting most the workers and small businesses least able to absorb the blow.”
Some key takeaways from the survey:
- CEO plans for hiring increased by 20.3 points to 46.6, 11.9 points below the sub-index’s historical average of 58.5.
- CEO plans for capital investment increased by 33.8 points to 58.8, 16.8 points below the sub-index’s historical average of 75.6.
- CEO expectations for sales increased by 35 points to 86.5, 24.7 points below the sub-index’s historical average of 111.2.
- In their third estimate of 2020 U.S. GDP growth, CEOs projected a 2.4 percent contraction for the year, a 1.4 percentage point increase from last quarter’s estimate.
Read more at the link.
