A survey conducted by the Business Roundtable during the fourth quarter indicates that the top CEOs in the nation have increased their hiring plans but cut their projections for sales and capital spending over the next six months. The survey also indicates that executives expect the economy’s growth rate to come up short of economists’ projections.
U.S. economic growth
According to USA Today, economists predict that the U.S. gross domestic product will rise by approximately 3% next year. Executives at the nation’s biggest corporations, however, expect a 2.4% growth rate for 2015.
AT&T Inc. (NYSE:T) CEO Randall Stephenson, who is also chairman of the Business Roundtable,” highlighted a few issues he believes are important for growing the economy. He said overhauling corporate tax laws and immigration, as well as greater freedom for the White House in trade agreement negotiations, are essential to boosting economic growth.
In the current quarter, economists expect the economy to slow down as the last two quarters offset economic weakness caused by severe winter weather during the first quarter.
What do CEOs expect in 2015?
According to the Business Roundtable’s survey, 74% of the CEOs who participated in the survey project an increase in their companies’ sales. That’s an increase from last quarter’s 73%. However, 9% of the 129 CEOs who responded are expecting a decline in sales, which is also an increase from last quarter’s 7%.
Of those surveyed, 36% of them are expecting their capital expenditures to increase, although that’s a decline from 39% in the previous quarter. One bright area in their projections is hiring plans, as 40% of those who participated in the survey expect employment at their companies to rise within the next six months. That’s compared to 34% in the previous quarter.
The Business Roundtable conducted the survey between Oct. 22 and Nov. 22.
Calls for changes
Stephenson said Congress should extend tax breaks for corporations that are scheduled to expire. He also purged lawmakers to push through broader changes in corporate tax law, saying that those changes would encourage corporations to invest in the U.S. economy. Additionally, he doesn’t think the president’s plan to help approximately 4 million illegal immigrants is enough, saying he thinks Congress should do more.
The executive also believes lawmakers should give the president authority to promote trade, thus enabling the White House to negotiate trade pacts. Congress would have to approve the pacts, although it could not amend or filibuster them.