US CEOs Also Optimistic About Economic Outlook... Highest Since 2022

CEOs of major U.S. corporations presented an optimistic outlook for the U.S. economy going forward. They increased their hiring and investment plans as well as sales expectations for the next six months, signaling an acceleration in economic activity.

According to the quarterly economic outlook survey by the Business Roundtable, a gathering of major corporate CEOs, the CEO Economic Outlook Index for Q1 recorded 85, up 11 points from the previous quarter. This is the first time since 2022 that it has surpassed the historical average of 83.

This reflects expectations that company sales will increase compared to the previous quarter. The Business Roundtable conducts quarterly surveys of CEOs regarding their company’s sales outlook, capital expenditure, and hiring plans for the next six months, and indexes these economic outlooks. A score above 50 indicates economic expansion, while below 50 indicates contraction.

In this survey, 77% of CEOs responded that their company’s sales would increase over the next six months. This contrasts with recent earnings reports from large U.S. retailers, which highlighted concerns over sales due to slowing consumer spending. The Q1 sales expectation index rose 13.1 points from the previous quarter to 117.7. CEOs’ responses indicating plans to increase capital expenditure and hiring were 39% and 36%, respectively.

Additionally, the U.S. GDP growth rate for this year was projected at 2.1%, an upward revision from the previous 1.9%. Axios described this as "an expectation of a continuously growing economy at a healthy pace." However, CEOs identified excessive regulation and antitrust measures as risks. More than 75% of respondents said government policies are harming U.S. business activities, with 92% expressing concern over excessive regulation.

Chuck Robbins, Chairman of the Business Roundtable and CEO of Cisco, emphasized, "This survey result highlights the resilience of the U.S. economy and suggests that economic activity will accelerate over the next six months," adding, "For the economy, the U.S. must expand policies that promote domestic investment and enhance competitiveness." The survey was conducted from February 15 to 29 with a total of 159 CEOs.

On the same day, the Federal Reserve (Fed) also reported that overall U.S. economic activity has slightly improved this year and that the outlook remains positive. In its Beige Book report on economic conditions, the Fed stated that "since early January, U.S. economic activity has increased slightly, on balance." It also noted that "the economic growth outlook remains generally positive," and "expectations were confirmed that demand will strengthen and financial conditions will become less restrictive over the next 6 to 12 months."

This confirmed economic optimism is also a factor supporting the recent rally in the New York stock market. On Wall Street, investment banks are raising their forecasts for further gains in the New York stock market based on corporate earnings improvements and expectations of a soft landing for the U.S. economy. Following Goldman Sachs, UBS, and Barclays, Bank of America (BoA) raised its year-end S&P 500 index forecast to 5400, the highest level on Wall Street this week. Meanwhile, the New York stock market closed slightly higher across the board on the day.

This content was produced with the assistance of AI translation services.