* CEOs lower forecasts for sales, hiring
* CEOs see U.S. economy growing 2.1 pct in 2012
* Europe's woes primary concern
By Scott Malone
BOSTON, June 20 U.S. chief executives' view of
the economy dimmed in the second quarter, with fewer expecting
to grow sales or add workers than three months earlier,
according to a survey by the Business Roundtable released on
W edn esday.
The group's CEO Economic Outlook Index fell to 89.1 in the
second quarter, down from 96.9 in the first quarter but still
well over the 50 mark that separates growth from decline. The
drop reflected increasing worry in corporate America that
Europe's economic troubles could take a toll on sales.
Seventy-five percent of CEOs said they expected their
companies' sales to grow over the next six months, down from the
81 percent who expected that in the March edition of the survey.
Thirty-six percent plan to add jobs in the United States over
the next six months, down from 42 percent last time, and 43
percent expect to boost capital spending, down from 48 percent.
The survey comes at the end of a quarter in which Europe's
economic woes intensified, leading some analysts to forecast
slower sales growth for corporate America this year. Investors
will get a more detailed view next month when top U.S.
companies, including Alcoa Inc, JPMorgan Chase & Co
and General Electric Co report results.
Analysts have lowered their second-quarter revenue and
profit estimates for big U.S. companies. Collectively, they look
for members of the Standard & Poor's 500 index to report
1.5 percent revenue growth, down from the 4.7 percent they had
expected in early April, according to Thomson Reuters I/B/E/S.
Profit forecasts are also down.
"Continuing concern about the eurozone and questions about
economic growth in Asia certainly act as a drag to continued
economic growth and expansion here in the U.S.," said James
McNerney, CEO of Boeing Co and chairman of the
EUROPE: THE BIG WORRY
Europe's woes are of far more concern than slowing growth in
China, McNerney said. About a quarter of U.S. exports go to
Europe, Roundtable officials said.
"The European situation could decelerate quickly," McNerney
told reporters on a conference call. "We hope it doesn't, but I
think it has a greater possibility to decelerate quickly,
whereas China is more a matter of having 6 percent growth as
opposed to 9 percent growth for a while."
Europe's sovereign debt crisis stands as one of the greatest
current risks to the world economy. While investors breathed a
sigh of relief after this weekend's elections in Greece, which
lowered the risk that the heavily indebted country would pull
out of the euro currency bloc, concerns are now rising that
Spain, the zone's fourth-largest economy, would need an
Political deadlock in Washington ahead of the November
elections also worries U.S. CEOs, particularly those in the
defense industry bracing for $500 billion in automatic
additional spending cuts later this year if Congress fails to
reach an agreement on other savings and revenues.
That and uncertainty on how U.S. tax policies could change
in the coming months has CEOs wary of hiring or committing to
large new capital investments, McNerney said.
"Companies are holding back," he said.
CEOs cut their forecast of overall growth in the U.S.
economy and now look for a 2.1 percent rise in gross domestic
product, versus the 2.3 percent forecast in March.
The survey of 164 CEOs was conducted from May 17 through
June 8. Business Roundtable member companies generate $6
trillion in annual revenues and employ more than 14 million