Washington, DC, June 8, 2006--Business Roundtable’s second quarter 2006 CEO Economic Outlook Survey shows that America’s leading CEOs see continued strength in the economy throughout the next six months, with the U.S. economy moving from a vigorous first quarter to a more sustainable, long-term growth trend.
As a result, the CEO Economic Outlook Index is 98.6, a slight decline from 102.2 in the first quarter but a figure that indicates continued healthy growth.
Business Roundtable is an association of chief executive officers of leading corporations with a combined workforce of more than 10 million employees and $4.5 trillion in annual revenues.
“America’s CEOs project the economy will continue to move at a healthy clip throughout the next six months, with the pace moderating from bullish first quarter growth to more steady and sustainable growth,” said Hank McKinnell, chairman of Business Roundtable and chairman and CEO of Pfizer Inc. “Expectations for company sales remain high among the vast majority of CEOs, employment projections remain solid, and capital spending projections reveal a continued willingness to invest, suggesting that business investment is likely to stay healthy over the next six months.”
“Our survey shows that CEOs believe the U.S. economy has the strength and stamina to withstand the challenges of high oil prices and rising interest rates,” continued McKinnell.
The survey’s key findings for the next six months of 2006 include:
On overall economic growth, CEOs are assuming 3.4 percent GDP growth in 2006, up from the 3.2 percent rate they were assuming in the first quarter survey. By comparison, GDP growth was 3.5 percent in 2005.
“This strong annual GDP growth projection of 3.4 percent most likely reflects the economy’s surprisingly robust first quarter performance,” added McKinnell.
The CEOs’ economic projections resulted in a CEO Economic Outlook Index reading of 98.6, a slight dip from the first quarter reading of 102.2. This reading remains firmly within the range of 94 to 104 that has been observed throughout the current economic expansion, and it signals continued healthy economic growth.
The CEO Economic Outlook Index combines the responses on projected sales, capital spending and employment into an overall index that shows how the CEOs believe the U.S. economy will perform in the six months ahead. It is a diffusion index centered on 50, which means anything above 50 is expansion and anything below 50 is contraction.
The Roundtable’s CEO Economic Outlook Survey, which has been conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economic assumptions and outlooks of Roundtable companies.
The second quarter survey was completed by 116 of the Roundtable’s 160 member companies. The percentages in some categories may not add up to 100 because of rounding. Results of all surveys can be found at www.businessroundtable.org/CEOSurvey/.
