CEO optimism is waning after a year of economic uncertainty.
The latest quarterly survey of America's top business leaders from the Business Roundtable found that pessimism is rising among America's chief executives when it comes to how they prepare for what could be coming for the U.S. economy in the short term.
Many CEOs remain cautious about domestic plans and expectations for the next six months due to continued supply chain challenges and inflation uncertainty, according to Mary Barra, the Chair of the Business Roundtable, General Motors GM.
Plans for hiring were decreasing by 17 points, plans for capital investment fell by 7 points and expectations for sales fell by 8 points over the last quarter.
CEOs identified growing labor costs as a top pressure point along with other factors like growing material costs, ongoing supply chain disruptions and price pressures from the energy sector that dragged on CEO sentiment.
The group also offered its first estimate of U.S. GDP growth in the year 2023, with CEOs projecting a relatively paltry growth rate of 1.2% for 2023.
The Business Roundtable is comprised of CEOs from hundreds of the nation's largest companies, and the group surveys its CEO members each quarter to measure how businesses are planning for the immediate road ahead. This edition of the survey, which took place between October 31 and November 28, featured input from 142 CEOs.
It was a year ago when the economic outlook from the nation's CEOs reached an all-time high but business leaders have had a stomach-churning year with inflation and other factors weighing on markets and executive optimism.
Wednesday s rating of 73 is much less than the 20 year high of 124 in the fourth quarter of 2021. The index is not close to its recent low of 34 - which was recorded shortly after the coronaviruses epidemic began in early 2020. This week s rating is above what the Business Roundtable considers as the expansion or contraction threshold of 50. The rating decline continues a year-long trend from 115 in the first quarter to 96 in the second quarter to 84 in the third quarter, as Business Roundtable CEO Joshua Bolten told reporters at the time that all of our CEOs are preparing for a situation in which the economy does experience a sharp downturn. He added that it's just a question of how deep this goes.
The group is also focused on sound public policy and weighed in on their policy priorities for the rest of the year in Wednesday s release.
Business Roundtable urged Congress and the Administration to take pro-growth policies, including restoring full and immediate expensing of American R&D investments this session and reforming the permitting system to expedite energy infrastructure projects, to strengthen the economy. We urge Congress to address the debt ceiling as soon as possible.