NEW YORK (AP) – An index measuring the expectations of 95 CEOs from among the nation's largest companies showed an improved outlook from last quarter's record low, but many still expect declines in sales, jobs and capital spending.
The Business Roundtable said Tuesday that its CEO outlook index rose to 18.5 in June from -5 in March, the lowest level since the survey began in 2002. A reading below 50 is consistent with a shrinking economy.
About half of the chief executives surveyed said they still expect drops in their companies' sales, U.S. capital spending and American employment in the next six months.
The Business Roundtable's 160 members include Caterpillar Inc., Eli Lilly & Co., Goldman Sachs Group Inc. and FedEx Corp.
"We don't see continued freefall," Ivan G. Seidenberg, the group's chairman and CEO of Verizon Communications, said on a conference call with reporters. "But nobody's ready to suggest they're going to begin hiring."
The CEOs also expect the nation's gross domestic product to shrink 2.1 percent this year, down from their previous estimate of 1.9 percent. GDP measures the value of all goods and services produced within the U.S. and is the broadest measure of the economy's health.
The economy shrank at an annual rate of 5.7 percent in the first quarter and 6.1 percent in the last three months of last year, the biggest six-month decline in more than 50 years. Many economists expect the GDP shrank between 2 and 3 percent in the quarter ending in June, and that it may grow slightly later this summer.
Those CEOs who expected their American payrolls to hold steady more than doubled to 45 percent in June, from 21 percent last quarter. Those forecasting job losses slid to 49 percent from 71 percent.
The CEOs who said they intended to hire actually inched lower in June to 6 percent from 7 percent in March.
The Obama administration said Monday that it expects the U.S. unemployment rate to hit 10 percent in the next few months. As of May, the jobless rate stood at a 25-year high of 9.4 percent.
Meanwhile, the percentage of CEOs expecting sales to fall dropped to 46 percent in June from 67 percent in the first quarter. Those expecting higher sales rose to 34 percent from 24 percent.
Just over half of the CEOs said they expected their U.S. capital spending to decline, down from 66 percent last quarter. Meanwhile, those expecting no change in capital spending rose to 37 percent from 25 percent.
Seidenberg said the state of capital markets was stronger than it had been several months ago, and companies' liquidity was better. Ramping up of corporate spending, however, would depend on increased demand from customers and consumers.
"Nothing looks worse than it did last quarter," he said. "We don't see a lot of new growth, but we're seeing a stabilization of certain signs that look positive for the economy."
The Business Roundtable is an association of CEOs of some of the biggest U.S. companies, which combined have more than $5 trillion in annual revenues and nearly 10 million employees. It surveyed its members from June 1 to June 12.