Getting a perspective from the top on the U.S. economy is incredibly important, especially seeing it through the eyes of this nation’s chief executive officers. The Business Roundtable released its CEO Outlook Index for the first quarter, and it was very positive considering recent market volatility.
Overall, the CEO Outlook Index increased to 118.6 in the first quarter of 2018, the highest level since the survey began in the fourth quarter of 2002. The survey was conducted between February 7 and February 26. These results reflect renewed CEO optimism and confidence following passage of the Tax Cuts and Jobs Act but do not capture effects of President Trump’s March 8, announcement of steel and aluminum tariffs.
The index exceeded its previous high point of 113 in 2011, and it has significantly surpassed its historical average level of 81.2.
All three components of the index reached record highs, ultimately signaling a positive direction for the U.S. economy:
- CEO plans for hiring rose to 98.5, up 22.8 from the fourth quarter of 2017.
- Plans for capital investment rose to 115.4, up 22.7.
- Expectations for sales reached 141.9, an increase of 19.9.
CEOs also are predicting that the gross domestic product will grow 2.8% in 2018, versus the previous quarter’s estimate of 2.5% for the year.
Jamie Dimon, board chair and chief executive of JPMorgan and chair of Business Roundtable, commented:
These results validate BRT’s advocacy of smart and inclusive economic policies. Put into action, the survey results translate into more jobs and opportunity for all Americans. BRT companies are stepping up to share the benefits of a strong business environment with their employees and their communities. We must do everything possible to continue to build on this strong momentum.
Joshua Bolten, Business Roundtable president and chief executive, added:
The impact of the new tax law is clear, with the Business Roundtable CEO Survey reaching its highest point in its 15-year history. Tax reform is already prompting more investment, jobs and increased wages and benefits for American workers.
Yet the economic progress made by easing regulatory burdens and reforming our tax code faces a looming threat. By taking measures to restrict international trade, the Trump Administration risks undoing this economic progress and harming American workers and businesses who rely on trade to stay competitive in the global marketplace.