Business Roundtable survey finds increased CEO confidence on sales although job losses will continue.
CEOs' projections about future business conditions improved by their biggest margin yet on the strength of better demand, but the record improvement has not yet translated into more hiring plans.
Those are the results released Tuesday of the Business Roundtable's third quarter survey (.pdf) of 107 CEOs of leading US companies. The biggest jump came in sales. Just over half of those surveyed expected their company's sales to increase in the next six months compared with only 34 percent last quarter.
This sales increase led to a modest rise in expected capital spending – a fifth of CEOs expected to raise it in the next six months, nearly double the percentage in the second quarter. But only 13 percent of CEOs expect to hire in the next six months compared with 40 percent who plan to lay off workers.
"This [improvement] will take a little longer because this has been a deeper recession," said Ivan Seidenberg, chairman of the Business Roundtable and CEO of Verizon Communications. He called the 26.4 point jump in the survey's index – the largest ever in its seven-year history – "fairly significant."
At 44.9, the index still signals that CEOs expect the economy to contract in the next six months, but at a much slower pace than the -5.0 reading in the first quarter of 2009.