As the world continues to battle the COVID-19 pandemic, U.S. business leaders remain pessimistic for positive changes in the next six months. The Business Roundtable on Monday released the results of its second-quarter CEO economic outlook survey, reporting an overall index score for the quarter was 34.3, down by more than 50% compared with a first-quarter index score of 72.7. That’s the lowest index reading since the second quarter of 2009.
The somewhat better news is that most CEOs expect their businesses to recover to pre-pandemic levels by the end of 2021. More than a quarter (27%), though, do not expect to recover until after 2021.
Nearly half (46%) of 136 CEOs surveyed between June 1 and June 22 report that they expect their companies’ U.S. employment to decrease. That’s double the percentage in the same period last year.
Almost as many (43%) expect capital spending to decrease year over year and 43% expect sales to decline in the next six months. In the second quarter of 2019, only 20% expected lower capital spending and just 22% expected falling sales.
Walmart CEO Doug McMillon, chair of the Business Roundtable, urged policymakers at all levels of government “to coordinate as much as possible to control further the spread of this virus.”
The Roundtable’s president and CEO, Joshua Bolten, called on policymakers “to work together on additional measures that will help bring a rapid end to this public health crisis and encourage economic recovery efforts as business operations resume.”
The survey indicated that CEOs expect gross domestic product to shrink by 3.8% this year, a dramatic change from the first-quarter estimate for GDP growth of 2.0%.
In a May letter to the Congress, the Roundtable urged continued unemployment insurance relief for families and individuals, along with an incentive to return to work once it was safe to do so. The group also supported a strong public health response to ensure a safe and timely economic recovery. Finally, the Roundtable encouraged strong support for small businesses.
The outlook for a recovery for the global economy is gloomy. In its most recent forecast, the OECD said that the decline in 2020 GDP could reach 9.3% among the world’s developed countries.
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