CEOs less up­beat on growth prospects

Los Angeles Times - - Daily Market Roundup -

Chief ex­ec­u­tives in the U.S. turned less op­ti­mistic in the third quar­ter as fewer pro­jected that sales and hir­ing would im­prove, a sur­vey showed Tues­day.

The Busi­ness Roundtable’s eco­nomic out­look in­dex fell to 86 in the July-to-Septem­ber pe­riod, the first de­crease since the be­gin­ning of 2009 when the gauge dropped to a record low of mi­nus 5, the Wash­ing­ton­based group said. Read­ings higher than 50 in­di­cate eco­nomic ex­pan­sion. The gauge fell from a sec­ond-quar­ter read­ing of 94.6, the high­est since 2006.

Sixty-six per­cent of re­spon­dents said they ex­pected sales to grow in the next six months, down from 79% in the sec­ond quar­ter, while 31% said they would add to pay­rolls, a de­crease of 8 per­cent­age points. At the same time, com­pa­nies are tak­ing the op­por­tu­nity to in­vest in new equip­ment, sig­nal­ing that cap­i­tal spend­ing will be a source of strength for the U.S. econ­omy.

“This is, and will con­tinue to be, some­what of a long and un­even re­cov­ery,” said Ivan G. Sei­den­berg, chair­man of the Busi­ness Roundtable and chief ex­ec­u­tive of Ver­i­zon Com­mu­ni­ca­tions Inc.

Forty-nine per­cent of ex­ec­u­tives said they planned to spend more on equip­ment, up from 43%, the sur­vey showed.

The ex­ec­u­tives re­duced their eco­nomic growth fore­casts to 1.9% for 2010 from 2.7% in the pre­vi­ous sur­vey. “We’re not see­ing busi­ness fun­da­men­tals de­te­ri­o­rate to the point where we would be concerned in a ma­jor way about a dou­ble dip,” or an­other re­ces­sion, Sei­den­berg said.

The Busi­ness Roundtable sur­vey, taken Sept. 1-21, in­cluded the re­sponses of 125 CEOs.

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