CEO outlook rises for first time in a year

CEOs expect 2.1 percent growth for 2013, a slight increase from last quarter’s estimate of 2 percent, which isn't enough to boost hiring and significantly lower the persistently high jobless rate that dropped to 7.7 percent last month. 

"The relatively smaller improvement in the outlook for hiring, however, may reflect ongoing uncertainty and a wait-and-see attitude about the business climate in the United States, as agreement on the nation’s debt and budgetary issues remains elusive," McNerney said. 

While those expecting to increase hiring remained unchanged at 29 percent through the first quarter, there was a slight decrease in those who say hiring will drop, down to 25 percent from 29. 

Still, business leaders argue that this level of hiring isn't necessarily the "new normal." 

A clear majority of business leaders expect improved sales during the next six months — up to 72 percent from 58 last quarter. 

Those expecting more capital spending rose to 38 percent from 30 during the final three months of last year. 

"The head-set of most of us is that this is a long, protracted, very slow recovery and hopes for businesses is to exceed the growth rate they have right now," McNerney said.

He said business leaders remain discouraged because Washington can't resolve some of the issues related to the framework of the economy and the uncertainty is "very real" as lawmakers and the Obama administration "lurch from crisis to crisis." 

"We're discouraged we're not moving faster, I for one, and most of my colleagues bigger hopes for companies and country."

One of those factors weighing on growth could be the across-the-board spending cuts that went into effect earlier this month. 

But McNerney said it is difficult to quantify the $85 billion sequester's on the business climate because companies have been anticipating the possibility and factoring into the overall equation. 

"We're facing reality," said BRT President John Engler. 

This recovery hasn't experienced the dramatic lift of past recoveries "but everyone is feeling better, but not having parties."

Plus, Engler said, Washington tends to be "overly dramatic." But added that while businesses don't think the world will end, "it's not paradise either."

Still, they argued that government influences business decisions "on the margins" and it is not the only thing companies are weighing in a global economy. 

While the economy gradually chugs along, the stock markets has soared, eclipsing record highs on an almost daily basis. 

McNerney acknowledged that there appears to be a disconnect between market performance and the ground discussion dominated by slow growth and high unemployment. 

But he countered that argument with the fact that the nation is operating amid a low interest rate environment, which is fueling investment in the markets. 

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