CEOs lower growth expectations as fiscal cliff approaches

With economic reports cooling and the fiscal cliff looming, the nation's chief executives are lowering their expectations for the U.S. economy.

A new survey from the Business Roundtable released Wednesday found that CEOs had less positive outlooks on their business, spending, and hiring over the next six months, compared to when they were last asked three months ago.

"CEOs envision somewhat slower overall economic growth for 2012 and have modestly lower expectations for sales, capital expenditures and hiring as compared to last quarter," said Jim McNerney, chairman of the roundtable and president and CEO of Boeing.

McNerney singled out "increasingly persistent obstacles" to a more robust recovery as culprits for the dwindling sentiment. In particular, concern over the European debt crisis, as well as uncertainty over how Washington will adjust its policies to avoid the fiscal cliff coming in 2013 were weighing on executives determining their plans in the coming months.

Lawmakers in Congress are expected to have a frantic end of the year. After the election they will wrangle with extending George W. Bush-era tax rates and the scheduled start of automatic, across-the-board spending cuts on Jan. 1, and experts warn the combination could push the economy back into recession.

All told, three-quarters of CEOs expect their sales to climb over the next six months, compared to 81 percent who expected that in the first quarter of the year. Less than half expect to increase their spending over that frame, roughly the same amount that expect to keep spending steady — a 5 percent drop from the last survey.

And as a disastrous May jobs report has pushed concern about the strength of the U.S. recovery to new heights, the survey found roughly a third of CEOs expect to increase hiring over the next six months, while 20 percent expect to lay off workers.

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