Slumping business could rebound as more chief executives say their firms plan to step up capital expenditures this year, reports Wall Street Journal writer Eric Morath.
According to Business Roundtable’s second-quarter CEO Economic Outlook Survey, the outlook is improving among top leaders. The survey found that 37% of CEOs at some of the country's largest firms plan to increase capital spending in the next six months, compared to 18% that plan to cut back. This is an increase from the responses in the first quarter survey, where 34% reported planned increases and 23% said they’d reduce such spending.
Companies’ hiring plans and sales projections also improved modestly, but the investment plans were the primary driver for the CEO outlook index rising to 73.5 in the second quarter from 69.4 in the first. The latest reading remains below the average of 79.8 since 2004.
“Increased plans for near-term sales, investment and hiring indicates modest economic improvement,” said Doug Oberhelman, CEO of Caterpillar Inc. and chairman of Business Roundtable. But weak growth expectations “points to an economy that continues to perform below its potential.”