CEOs have no confidence in U.S. economy: survey
Last Updated: Tuesday, April 7, 2009 | 3:48 PM ET
CBC News
U.S. CEOs say their companies face no prospect for financial recovery in the next six months, according to a new survey of executive sentiment released Tuesday.
The Washington-based Business Roundtable said its first quarter poll of American executives' feelings about their firms' fortunes during the next six months tumbled to a reading of negative five.
That figure — which measures the CEO prospects in terms of higher sales, employment and capital spending — is the lowest result since the organization of chief executive officers began taking the temperature of its members in 2002.
By comparison, the sentiment measure peaked at 101.7 in the fourth quarter of 2004.
Lower growth
Member CEOs now forecast that the American economy will contract by 1.9 per cent in 2009, more optimistic than some prognostications, but a retreat from the fourth quarter of 2008. Back then, those executives thought 2009 would see zero GDP growth.
"The results underscore the significant pressures that the global economy continues to put on U.S. businesses," the Business Roundtable said in a statement.
In the next six months, 67 per cent of these CEOs said their firms' sales would drop, 66 per cent said they would spend less on capital goods and a hefty 71 per cent essentially said they would cut jobs.
The CEO index is a mathematical summation of CEO responses to these three questions.
The results can reach a high of 150 and a low of negative 50. Anything below a positive 50 is consistent with an economic contraction.
In fact, the confidence barometer has only dipped below 50 twice, the first quarter of 2009 and the fourth quarter of 2008.
