A recent report from Business Roundtable indicates a notable uptick in CEO sentiment regarding the US economy, marking the first time in two years that the gauge has moved above its historical average. The index surged by 11 points quarter-over-quarter to reach 85, reflecting increased optimism among top executives. Moreover, CEOs anticipate growth in hiring, capital investment, and sales over the next six months.
Positive Outlook and Resilience
Chuck Robbins, Chair of Business Roundtable and CEO of Cisco, emphasized the resilience of the US economy based on the survey results. He expressed confidence in accelerating economic activity in the near future, citing the upbeat sentiment revealed by the report.
Economic Growth Projections
CEOs participating in the survey also provided an optimistic outlook for US GDP growth, forecasting a 2.1% increase for the year, up from the prior quarter’s estimate of 1.9%. This positive outlook aligns with official data showing robust annualized growth of 3.3% in the fourth quarter of 2023, surpassing consensus estimates.
Decreasing Recession Risk
The report suggests that top executives are increasingly supportive of expectations for a soft landing of the US economy, with diminishing odds of a recession. The International Monetary Fund (IMF) echoed this sentiment in a January report, projecting higher-than-expected global growth for 2024, largely driven by the strength of the US economy.
Alignment with Broad Sentiment
CEO sentiment mirrors improving sentiment among the broader American population. The University of Michigan consumer sentiment report revealed a positive start to the year, reaching its highest level since July 2021. Although there was a slight dip in the February reading, overall sentiment remains elevated compared to the previous year.
Concerns About Government Policy
However, a special question in the survey highlighted CEOs’ concerns about government policy and regulation. Many CEOs expressed apprehension about excessive regulation and antitrust actions, which they believe are undermining the principles of free enterprise and its associated benefits. Business Roundtable CEO Joshua Bolten emphasized the importance of policymakers prioritizing economic growth, job creation, and economic mobility to address these concerns.
In summary, the surge in CEO sentiment reflects growing confidence in the resilience and future prospects of the US economy, albeit with lingering concerns about regulatory challenges.
