Slower hiring. Weaker spending. And softer growth. That’s what America’s CEOs are bracing for as the economy heads into 2023 facing a series of obstacles.
The Business Roundtable said Monday its CEO Economic Outlook Index tumbled during the fourth quarter to the lowest level in more than two years.
The index, a composite of CEO plans for business investment, hiring and sales expectations, has declined every quarter this year, plunging from 124 a year ago to 73 now.
“The results signal CEOs remain cautious amid persistent domestic and global economic headwinds, including high inflation and the Fed measures required to tame it,” the Business Roundtable said in a news release.
The Federal Reserve has been rapidly raising interest rates in a bid to put the inflation fire out. But those rate hikes are also raising borrowing costs for consumers and businesses alike and increasing the risk of a downturn.
Although the Business Roundtable index is still above the 50-point threshold that separates expansion from contraction, CEOs sharply marked down their plans for hiring, capital investment and expectations of sales.
CEOs surveyed by the Business Roundtable are now calling for growth of just 1.2% next year, down from nearly 6% in 2021.
“With continued supply chain challenges and inflation uncertainty, many CEOs remain cautious about domestic plans and expectations for the next six months,” GM CEO Mary Barra, who chairs the Business Roundtable, said in a statement.
Forty-nine percent of CEOs flagged labor costs as the top cost pressure facing their business, followed by 15% who identified material costs and 14% who cited supply chain disruptions.
Of course, the survey only captures sentiment from CEOs and actual business activity may differ significantly.
It’s also worth noting the Business Roundtable survey fielded responses from dozens of business leaders last month and recent indicators including the jobs report and holiday shopping have come in stronger than expected.
Still, given the uncertainty facing the American economy, Business Roundtable CEO Josh Bolten urged Congress to address the looming fight over the debt ceiling “as soon as possible.”
Source : Cnn