CEOs say Washington is putting brakes on economic recovery

The nation’s business leaders are growing optimistic about the economic recovery, but say Washington is making the comeback less certain.

The latest survey from the Business Roundtable found that CEOs expect to sell more, spend more and hire more in the next six months. They also expect the economy to gain steam, growing 2.3 percent in 2012, up from a previous estimate of 2 percent. Overall, CEOs are the most optimistic they’ve been about the economy in the last nine months.

But that optimism is being tempered by the continued inability of policymakers in Washington to deal with a number of pressing issues, according to the group’s leaders.

“We all wish that we could get some conclusions in Washington ... at least to get some certainty, even if the answer isn’t perfect,” said Jim McNerney, chairman of the Roundtable, which represents the CEOs of the nation’s largest companies.

The president and CEO of The Boeing Company added that as businesses try to plan for the near future, the partisan standoff in Washington is “a big creator of uncertainty for a lot of us.”

Roundtable President John Engler rattled off a number of measures that have stalled in Congress, including a transportation bill and efforts to come up with a substitute for the $1.2 trillion in automatic cuts set to take effect at the end of the year, as the type of thing that looms over businesses.

“All these specific decisions, none of which are getting resolved,” said the former Republican governor of Michigan.

Beyond Congress, businesses chided a regulatory environment that is “less friendly” to businesses than it was in previous years as another hindrance to their growth.

“Right now, it feels like we’re working against each other a little more than we should,” McNerney said.

But Washington is not the only threat to fledgling business optimism. The group also cited the European debt crisis, potential economic slowdown in China and rising gas prices as cause for concern.

Nonetheless, the broad economic picture is looking rosier for the nation’s top executives. Of the CEOs surveyed by the group, 81 percent said they expect to increase their sales in the coming months, while 48 percent expect to boost capital spending.

Employment expectations were somewhat more tempered, as 42 percent said they expect to boost hiring, while 43 percent expect to hold steady at current levels. But fewer CEOs expect to lay off employees when compared to the end of last year. Now, just 16 percent expect to trim staff, compared to 24 percent in the final quarter of 2011.

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