The report from Business Roundtable’s first quarter "2008 CEO Economic Outlook Survey" has been released today. This was completed between March 10th and March 27th by 100 of the Roundtable’s 160 member CEOs. We wanted to review this data to compare some of our own ideas for the current state of the economy and trends.
CEO’s of America’s top companies overall see flat expectations for sales, cap-ex, and employment over the next six months. Of course the strong demand from overseas markets is expected to give some relief from the U.S. downturn.
The Business Roundtable CEO Economic Outlook Index reading was actually unchanged at 79.5 in Q1 2008 compared to Q4 2007. That doesn’t exactly coincide with the March FOMC Minutes we outlined from this week, but it is another viewpoint. There we noted a "recession without a recession mention."
This is not exactly every single company nor every CEO out there, sothis isn’t a perfect metric to read into future GDP or payrolls. TheBusiness Roundtable is an association comprised of CEO’s of leadingcorporations, which represents a combined workforce of nearly 10million employees and $4.5 trillion in annual revenues and near. Here is the list of current members.
Over the next 6-months, 70% of CEO’s surveyed expect company sales toincrease and 21% expect no change. On cap-ex, 35% expect to see anincrease and 50% expect a decrease. On employment, 30% expect anincrease in employment, 48% see no change, and 22% expect a decrease.These CEO’s are also predicting a 1.5% GDP growth for Q1, which is downfrom a prior 2.1% projection.
We at 247WallSt.com have constant discussions with businessowners/managers and consumers alike in an effort to gain any additionalinsight outside of the media. What is interesting is that this doesn’texactly scream recession-recession. Our own discussions have yielded much of thesame, but the discrepancies are wide from the higher end of the economyto the lower end of the economy. The overall climate is mostly recessionary, even if the numbers don’t go truly negative or don’t reflect the panic enough. 300 millionaires won’t offset 1 million of the newly-broke, but there also won’t suddenly be 1 million people in bread lines either.
Cost cutting persists, but business is grinding to an entire halt. Oneof our other trends we keep running into is actually some relief thatthe lunacy of 2005, 2006, and part of 2007 has come to an end and timesare at least more normalized. The de-leveraging we are seeing shouldonly continue. That will take away some of the boom cycle in the nextuptrend but it will also keep the downside from turning into acatastrophe.
The overall climate is still recessionary from our own findings when you include the pain and panic that is occurring in a solid 5% to 10% of the public, butthere is good news. Sixty days ago it wasn’t clear if we were on theverge of a meltdown or if certain stop-gaps would be put in place. Thelatter is prevalent, at least for this week, and that translates to agarden variety recession instead of a deep recession.
Jon C. Ogg
April 10, 2008