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CEO's Economic Concerns - 12/15/15

For a third consecutive quarter, the nation’s CEOs have expressed growing concern regarding America’s economic prospects in the short term.  Accordingly, a higher proportion of surveyed CEOs expects to curtail capital investment over the next six months. 

The Business Roundtable CEO Economic Outlook Index, a composite of CEO projections for sales, investment and hiring plans over the next six months, fell six point six points to a reading of sixty seven point five during the current quarter.  This represents the lowest index reading in three years. 

To put the latest index reading into perspective, the long-term average for the index is above eighty.  Of the one hundred and forty CEOS surveyed, sixty percent said that they expect sales to increase over the next six months.  While that suggests that a recession is not imminent, that proportion is down from sixty three percent from the prior quarter. 

The proportion of CEOs who expect their capital spending to fall over the next six months rose to twenty seven percent, up from twenty percent during the third quarter.  As reported in the New York Times, many CEOs have become more concerned because of a weaker global environment, unsettling geopolitical events, and a lack of progress in improving America’s business climate.

 

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.