CEO sur­vey paints brighter picture for ’12

The Washington Times Daily - - Business - BY CHRISTOPHER S. RU­GABER

A grow­ing num­ber of chief ex­ec­u­tives at large U.S. com­pa­nies say they are more op­ti­mistic about the econ­omy and plan to step up hir­ing. The brighter view from the board­room comes af­ter the best three months of job growth in two years.

The Busi­ness Round­table said Wed­nes­day that a sur­vey of its CEO mem­bers found that 42 per­cent ex­pect to hire in the next six months. That’s up from 35 per­cent three months ago.

Nearly half plan to spend more on ma­chin­ery and other cap­i­tal equip­ment, and more than 80 per­cent ex­pect their sales to rise.

The chief ex­ec­u­tives’ over­all out­look on the econ­omy im­proved sharply from the end of last year. The group’s out­look in­dex jumped to 96.9 in the cur­rent Jan­uary-march quar­ter. That’s up from 77.9 in the pre­vi­ous quar­ter and the high­est read­ing since last spring.

The group is an as­so­ci­a­tion of the lead­ers of the 200 big­gest U.S. com­pa­nies.

The fourth-quar­ter sur­vey’s find­ing that only 35 per­cent of CEOS planned to add jobs was the low­est in five quar­ters. Yet the next three months saw the big­gest job gains in two years.

The econ­omy has added an av­er­age of 245,000 jobs per month since De­cem­ber. That has dropped the un­em­ploy­ment rate to 8.3 per­cent, the low­est in three years.

It sug­gests that most of the gains came from smaller com­pa­nies, rather than the large cor­po­ra­tions that make up the Round­table’s mem­ber­ship. Re­search shows that small and, par­tic­u­larly, new busi­nesses cre­ate most of the new jobs in the United States. Busi­nesses with fewer than 500 em­ploy­ees ac­count for about 65 per­cent of jobs cre­ated in the past 20 years.

The im­prove­ment in the CEO sur­vey sug­gests the job gains “will con­tinue,” said Jim Mcner­ney, chair­man of the Round­table and CEO of Boe­ing Co.

But plenty of con­cerns re­main, he said. Europe’s debt cri­sis could weigh on the U.S. re­cov­ery. Growth has slowed in China. And oil prices have spiked since the fall, driv­ing gas prices back up to their high­est level in nearly a year.

Amer­ica’s top busi­ness ex­ec­u­tives were nearly as con­fi­dent in the econ­omy last spring — be­fore trou­ble with Europe’s econ­omy and el­e­vated en­ergy prices dimmed their out­look.

The in­dex’s cur­rent read­ing is the best since it was at 109.9 in the April-june quar­ter of 2011.

“There’s hope in all our hearts that won’t hap­pen this time, but a lot of those head­winds are still there,” said John En­gler, pres­i­dent of the Round­table and for­mer gov­er­nor of Michi­gan.

The CEOS also boosted their fore­cast for eco­nomic growth to 2.3 per­cent this year, up from a 2 per­cent pro­jec­tion four months ago. Mr. En­gler, a Re­pub­li­can who served from 1991 to 2003, said that showed growth ex­pec­ta­tions are still mod­est. CEOS are “more op­ti­mistic, but we’re not ready to have a pa­rade,” he said.

The sur­vey is based on 128 re­sponses re­ceived from March 1 to 19.

Dow Nas­daq S&P 500 Rus­sell 2000 13,126.21 3,104.96 1,405.54

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