Tags: Survey | US | CEOs | Most | Optimistic | 2006

Survey: US CEOs Predict Higher Sales, More Hiring

Tuesday, 14 Dec 2010 09:46 AM

Optimism among U.S. chief executives in the fourth quarter rose to the highest level since the start of 2006 as business leaders projected increased sales, investment and hiring, a private survey showed.

The Business Roundtable’s economic outlook index climbed to 101 after falling in the previous quarter for the first time since the beginning of 2009, the Washington-based group said today. Readings higher than 50 coincide with an economic expansion. The gauge, which increased from a third-quarter reading of 86, rose to 102 in the first quarter of 2006.

Forty-five percent of respondents said they will add to payrolls, an increase of 14 percentage points, while 80 percent said they expect sales will grow in the next six months, up from 66 percent in the third quarter. Businesses need to pick up hiring to lower an unemployment rate that’s been at 9.5 percent or higher for 16 straight months, the longest such stretch since record-keeping began in 1948.

“Demand is returning as evidenced by anticipated sales increases, and that is good news. When demand increases, capital expenditures and employment follow, which is what we expect to see in the next six months,” Ivan G. Seidenberg, chairman of the Business Roundtable and chief executive officer of New York- based Verizon Communications Inc., said in a statement.

Fifty-nine percent of executives said they plan to spend more on equipment, up from 49 percent, the survey showed.

The executives forecast U.S. economic growth of 2.5 percent in 2011 after projecting 1.9 percent growth for 2010 in the previous survey. That compares with the 2.6 percent median estimate of economists for 2011 surveyed by Bloomberg News from Dec. 2-8.

‘Sustainable Growth’

“There is still more work that needs to be done to get the economy back on the path toward strong, sustainable growth,” Seidenberg said.

The Business Roundtable survey was taken from Nov. 8 to Dec. 3, and there were 136 respondents.

The recession that began in December 2007 led to the loss of about 8.4 million jobs, the biggest employment slump in the post-World War II era. So far this year, companies have added 1.2 million jobs, not enough to keep the unemployment rate from rising to 9.8 percent in November.

Materials, health care and labor costs topped the list of the respondents’ chief concerns. About one-third said material costs will have the greatest impact on their business.

“Copper prices and corn prices are at near record highs. Cotton prices and most metals prices are also very high,” Seidenberg said. “As a result of these marked increases, materials are being cited as the greatest cost pressure, with health care costs coming in next as a significant cost pressure.”

Profitable Ford

Ford Motor Co., the world’s most profitable automaker, on Dec. 9 said it plans to hire 1,800 workers by the end of 2011 and spend $600 million to overhaul a factory in Louisville, Kentucky, to build small sport-utility vehicles. Ford earned $6.37 billion in the first nine months of the year, more than any other global carmaker.

General Electric Co., a member of the association, last week raised its dividend for the second time in five months. Chief Executive Officer Jeffrey Immelt said the decision reflected strong cash generation, accelerated recovery at GE Capital and solid underlying performance in the industrial businesses.

The Business Roundtable is an association of 193 CEOs from corporations representing a combined workforce of more than 12 million employees and almost $6 trillion in annual revenue. Member companies comprise nearly a third of the total value of the U.S. stock markets and pay $167 billion annually in dividends to shareholders, according to the group’s website.

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Optimism among U.S. chief executives in the fourth quarter rose to the highest level since the start of 2006 as business leaders projected increased sales, investment and hiring, a private survey showed. The Business Roundtable s economic outlook index climbed to 101 after...
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Tuesday, 14 Dec 2010 09:46 AM
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