America’s business leaders are losing faith in the economy’s ability to produce a strong recovery by the end of the year.
The Business Roundtable’s second-quarter Economic Outlook Survey, released Wednesday, saw a decline in optimism from the nation’s leading CEOs, with lower expectations for growth in sales, capital spending and hiring.
Boeing Chief Executive Jim McNerney, chairman of the Business Roundtable, and Roundtable CEO John Engler said the downturn in business confidence reflected rising uncertainty created by government regulations, looming budget and tax issues, and the European debt crisis.
These issues are becoming “increasingly persistent obstacles to a stronger recovery,” Mr. McNerney said in a statement.
Mr. Engler said in a press call with reporters that the uncertainty facing business owners currently “is pretty lethal.” The business group’s forecast index dropped to 89.1 in the second quarter from 96.9 in the previous quarter.
While more CEOs still expect the economy to improve in the areas of sales, capital spending and hiring, the number of optimistic business leaders dipped from the first quarter.
Over the next six months, 75 percent of CEOs expect sales to increase, down 6 percent from the previous survey, while 20 percent expected no change and 6 percent expected a decline.
Capital spending over the same period is expected to increase by 43 percent of CEOs, down 5 percent from the previous survey, while 45 percent expect no change and 12 percent expected a decline.
Hiring over the same period is expected to increase by 36 percent of CEOs, down 6 percent from the previous survey, while 44 percent expect no change and 20 percent expect a decline.
The business leaders’ survey forecast that real gross domestic product will grow by 2.1 percent in 2012, down from last quarter’s estimate of 2.3 percent.