The Business Roundtable's (BRT) latest quarterly survey of CEOs released on Wednesday found a small decrease in expectations for economic growth for the next six months, and 50 percent of respondents said inaction in Congress on issues such as the debt ceiling negatively affects plans for hiring at their companies.
The BRT third quarter 2013 CEO Economic Outlook Survey projected that the economy will continue to grow, but CEOs were less optimistic about the pace of growth than in the previous quarter. Overall CEO expectations for economic growth dropped to 79.1 from 84.3 as reported in the previous quarter. CEOs expect a 2.2 percent annual growth rate for GDP in 2013, which was the same expectation reported during the previous BRT quarterly survey conducted in June. Hiring expectations increased slightly from the previous quarter due to fewer CEOs expecting a decrease in hiring.
The CEOs in the survey represent top U.S. companies with a total of $7.4 trillion in annual revenues and more than 16 million employees. The full report is available here.
"CEO expectations for the next six months remain essentially the same with some downside bias. Expectations for sales and capital investment both declined modestly in this survey," Business Roundtable Chairman Jim McNerney said during a conference call on Wednesday explaining the survey.
The BRT has conducted the survey since 2002, and this latest 79.1 percent expectation of economic growth is close to the survey's long-term average level of 79.3 percent.
This quarter's survey "reflects an economy that continues to grow, but slowly and not to its full potential," said McNerney, who is also chairman, president and CEO of Boeing.
The survey also addressed whether disagreement in Congress was to blame for lackluster economic optimism. When BRT asked executives whether disagreement on the 2014 budget and the debt ceiling in Congress has a negative impact on their plans for hiring for the next six months, 41 percent responded "somewhat" and 9 percent said it would have a "much more negative impact," Business Roundtable President John Engler said during the conference call.
"Failure to resolve these issues and get it done in a timely way can only heighten the damage to the economy," Engler said. "Gridlock in Washington is not a good thing for economic strength."
When McNerney was asked during the call whether the BRT is supporting Republican proposals including defunding the Affordable Care Act as part of its outreach for solutions on the debt ceiling, McNerney said BRT is "spending an equal amount of time talking to both sides of the political spectrum."
"We are not supporting either side," McNerney said. "The gut issue is both sides getting together giving a little more than they each want to and finding a solution."