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CEOs predict more bad economic news |
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By Kristen Coulter
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Posted: 06/18/08 02:22 PM [ET] |
Chief executives of America’s top companies don’t expect the economy to improve until well after the next president takes office.
Most do not expect the American economy to rebound until the second quarter of 2009, according to the Business Roundtable’s Economic Outlook survey, which was released on Wednesday.
The plunging real estate market has slowed U.S. economic growth, and CEOs do not expect home prices to bottom out until the second quarter of 2009, Business Roundtable Chairman Harold McGraw said.
The CEOs “have tempered their expectations for economic activity for the next six months,” McGraw said on a conference call. He also noted that the rising cost of fuel and other commodities continues to raise business expenses.
The economy is expected to be the No. 1 issue in the battle for the White House between Sens. Barack Obama (D-Ill.) and John McCain (R-Ariz.).
More CEOs expect to cut their payrolls than add to them, as McGraw said the CEOs projected a “noticeable decrease” in hiring. Thirty-one percent of CEOs project lower employment in the next six months, while 28 percent of CEOs say they will add employees in the next six months.
Although the percentage of unemployed Americans has increased, McGraw said this figure may indicate the economic slump is nearing an end since employment levels lag behind other indicators of a falling economy.
McGraw said CEOs do expect positive growth in the second and third quarters of 2009. He also said exports continue to help the U.S. economy.
“Strong demand from overseas market[s] is providing some relief,” he said, before adding that “our member CEOs remain cautious about the softening economy.”
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