CEOs’ plans take off over Trump agenda
They plan to hire, spend more as small business optimism drops a bit
The nation’s top CEOs stepped up their hiring and investment plans in the first quarter amid a burst of confidence over President Trump’s pro- business agenda, showing no signs that early political roadblocks had dimmed their optimism.
Meanwhile, small business optimism pulled back slightly but remained near its record high.
“CEOs are increasingly positive about the direction of the U. S. economy,” Joshua Bolten, head of Business Roundtable, an association of chief executives of the nation’s leading companies, told reporters Tuesday. “I think it’s fair to say CEOs see the business environment as improving with the president’s focus on jobs and growth.”
Forty- one percent of CEOs plan to increase hiring in the next six months, up from 35% in the fourth quarter, according to a Business Roundtable survey. Just 18% expect to reduce employment, down from 30% late last year. And 46% of the top executives intend to increase capital spending, up from 35%. Just 13% plan to rein in such investment, down from 21%.
Seventy- eight percent of those surveyed believe sales will rise in the next six months, up from 67% in the prior quarter. Just 4% expect sales to fall, down from 14%.
The Business Roundtable’s overall index, which combines all these elements, jumped to 93.3 from 74.2, the first time it cleared its historical average of 79.8 in nearly two years.
Trump’s plan to reduce corporate taxes already has faced hurdles. And Trump has yet to lay out his $ 1 trillion plan to upgrade the nation’s crumbling roads, bridges and highways.
Yet the president has taken steps to roll back financial and other regulations, and that’s largely stoking the executives’ confidence in the administration’s early days. Fifty- two percent of those surveyed said tax reform would be the best policy for creating a pro- growth environment, followed by the 27% who cited regulatory reforms.
Jamie Dimon, chairman of the Roundtable and CEO of JPMorgan Chase, said he had high hopes for infrastructure upgrades. “This country has not built a new airport in 30 years,” he said.
Dimon said he wasn’t worried the Federal Reserve’s interest rate hikes will slow the 71⁄ 2- year- old recovery.
“If the Fed is raising rates into a strong environment, the strong environment is far more important than a raise of 25 basis points,” Dimon said.
The Fed is expected to lift its benchmark short- term rate by a quarter percentage point at a meeting that ends Wednesday.
Separately, a monthly index of small business optimism dipped in February — with hiring and investment plans edging down — but it remained near record highs following the largest evermonthly increase in December after the election. Small firms took a more cautious view of whether Trump can turn his blueprint into reality, according to the National Federation of Independent Business.