Business Roundtable Releases Second Quarter 2007 CEO Economic Outlook Survey

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Manufacturing News, Source : The Manufacturer US
Published : 07 Jun 2007 14:35

WASHINGTON, June 5 -- Business Roundtable's second quarter 2007 CEO Economic Outlook Survey shows that leaders of America's top companies continue to see the U.S. economy in a stable position moving

forward with generally favorable business conditions. The CEO Economic Outlook Index, which indicates how CEOs believe the economy will perform in the six months ahead, dipped slightly to 81.9, a three point decrease from 84.9 in the first quarter of 2007.

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.

"This quarter's survey shows that CEOs see favorable business conditions continuing," said Harold McGraw III, Chairman of Business Roundtable and Chairman, President and CEO of The McGraw-Hill Companies.

"While the survey does suggest that the U.S. economy is settling into a somewhat softer consolidation phase, as long as consumers keep spending, the economy can continue to move ahead."

On overall economic growth, CEOs are now assuming 2.6 percent GDP growth in 2007, a view that is slightly more optimistic than the consensus view of private economists who project a range of 2.0 percent to 2.5 percent.

CEO Economic Outlook Index Demonstrates Economic Stability

The company projections resulted in a CEO Economic Outlook Index of 81.9, a slight decrease from the 84.9 reading in the first quarter of 2007.

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.

CEO ECONOMIC OUTLOOK INDEX

Survey CEO Economic

Date Outlook Index

2007 Q2 81.9

2007 Q1 84.9

2006 Q4 81.9

2006 Q3 82.4

2006 Q2 98.6

2006 Q1 102.2

2005 Q4 101.4

2005 Q3 95.9

2005 Q2 94.3

2005 Q1 104.4

This latest index value remains steadily above the 50-70 range observed in late 2002 and early 2003, as the economy recovered from the last recession.

"In the past four quarters, the CEO Economic Outlook Index has been between 81 and 85, a range that is consistent with continued moderate economic growth, but suggests a less robust snapshot than was the case from

2004 through early 2006." concluded McGraw.

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 survey was completed between May 11 and 23 by 100 of the Roundtable's 160 member companies. The percentages in some categories may not add up to 100 because of rounding. Business Roundtable is an association of chief executive officers of leading U.S. companies with $4.5 trillion in annual revenues and more than 10 million employees. Member companies comprise nearly a third of the total value of the U.S. stock markets and represent over 40 percent of all corporate income taxes paid. Collectively, they returned $112 billion in dividends to shareholders andthe economy in 2005.

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