Businesses leaders have gloomier expectations on sales, capital spending and hiring over the next six months, with the index plunging to 66 in the June-September quarter from 89.1 in the second quarter, the lowest reading since the third quarter of 2009 and the third largest single quarter drop in the survey’s history.
“The downshift in quarterly sentiment reflects continuing concern about the strength of the recovery, including uncertainty over the approaching fiscal cliff and accompanying debates about the tax code, sequestration and the debt ceiling," he said.
McNerney said businesses leaders are getting more nervous the closer Congress gets to the deadline for the looming fiscal cliff, set to go into effect in January.
Greater clarity on those issues "would help a lot" and likely lift businesses expectations for the future, McNerney said.
"The ongoing level of uncertainty needs to be addressed."
Even if Congress opts for a short-term solution on tax and spending policies, as long as they provide a framework for a broader solution, "then you know what game you're in and that would go a long way to remove uncertainty."
On the flip side, if lawmakers opt to just kick the can down the road, it is continued "purgatory," McNerney said.
Business leaders are pushing for a robust and complex post-election agenda that would not only provide solutions on spending and taxes but would include approval of the Keystone pipeline as well as permanent normal trade relations with Russia and export-control reform.
"Businesses are ready to do impressive things if we move ahead," said John Engler, the Business Roundtable's president.
"There's a lot in play so let's start deciding things ... we can lead but we can't lead by not making decisions."
The survey was completed between Aug. 30 and Sept. 14 with responses received from 138 CEOs, 65 percent of membership.