CHICAGO (Reuters) - For the third consecutive quarter, U.S. CEOs expressed growing caution about the country’s economic prospects in the short term and more said they expected to curtail capital investments over the next six months, according to a survey released on Tuesday.
The Business Roundtable CEO Economic Outlook Index – a composite of CEO projections for sales, investment and hiring plans over the next six months - fell 6.6 points to 67.5 in the fourth quarter, its lowest level in three years.
The long-term average for the index is 80.1 points.
The survey by Business Roundtable, an association of chief executive officers of leading U.S. companies, found expectations for sales and plans for capital expenditure both fell. Hiring plans remained consistent.
Of the 140 CEOs surveyed, 60 percent said they expected sales to increase over the next six months, down from 63 percent during the previous quarter.
The proportion of CEOs who said they expected their capital spending to decrease over the next six months rose to 27 percent from 20 percent in the third quarter.
Randall Stephenson, chairman of Business Roundtable and CEO of AT&T Inc T.N, said the projected decline in capital investment was most concerning.
“Capital spending as a percentage of the U.S. economy is at historically low levels,” Stephenson said on a conference call. “We’re hampering and we’re burdening capital investment in the U.S.”
He said an uncompetitive tax code and government regulations have increased costs for companies, and he hopes to see legislative action soon to expand trade, reauthorize the U.S. Export-Import Bank and renew expired tax provisions.
CEOs said that regulation was the top cost pressure facing their business, followed by labor and health care costs.
While Stephenson focused on the need for changes in domestic policy regarding trade and the tax system, he said international tension following the Syrian refugee crisis and recent attacks by the Islamic State were also a factor.
Reporting By Nick Carey and Katie Reilly; Editing by Nick Zieminski
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