CEOs More Optimistic About Global Than U.S. Economy
Top chief executives are more optimistic about prospects for the global economy than they are for the U.S. economy, according to The Business Council Survey of CEOs. Nearly three quarters of CEOs surveyed expect global growth in 2013 will keep pace with 2012 and almost 60% expect growth to quicken in 2014.
Despite the belief that the global economy will grow in the next two years, confidence is an issue, with 64% of respondents saying that they were “very” or “somewhat” confident that growth would return to previous high rates, a decline of 21 percentage points from the last survey in October.
“Corporations and governments around the world must work together to boost confidence,” said Andrew Liveris, chairman and CEO of The Dow Chemical Company and chairman of The Business Council. “Confidence is the major arbiter of corporate investment decisions, and is required for executives to make the sound judgments that will be required to stimulate growth around the world.”
Chief executives are most optimistic about the prospect of improving conditions in China than any other economy, with 57% of respondents expecting an improvement of business conditions there, compared to 30% in the previous survey and 36% optimistic about improving conditions globally.
Consistent with results from Business Council surveys for nearly three years, the most recent survey found that the economy cannot move forward without improving confidence.
“Sentiment has improved from the lows of last October, but members remain cautious,” said Richard K. Davis, chief executive officer of U.S. Bancorp and vice chairman of The Business Council. “Budget and deficit policies continue to be the top policy concerns, followed closely by health care, education and energy.”
Continued uncertainty and inaction from government leaders continues to weigh on confidence and delay investment commitments. Only 14.5% of those surveyed believe that the fiscal cliff deal did anything to solve long-term problems. Eighty% of those surveyed do not believe that the agreement was a meaningful step to resolving the deficit issue, and 84% believe it relied too much on taxes and too little on spending reform.
To read the full survey click here.