CEOs predict 5% growth for 2021: Business Roundtable
Yahoo Finance’s Jessica Smith breaks down the Business Roundtable quarterly CEO outlook survey.
Video transcript
- Well, optimism among CEOs of some of the largest US companies is actually near a record high. That's according to the latest Business Roundtable's quarterly survey. Our chief political correspondent, Jessica Smith, is here now to break that down for us. Jess, why are they so optimistic?
JESSICA SMITH: Yeah, Alexis, the group says that this shows that the US economy is getting back on track after the pandemic. The only time that the optimism level was higher was back in the first quarter of 2018, right after those 2017 tax cuts were approved. So of the 170 plus CEOs that were surveyed, 91% expect sales to increase over the next six months, 59% expect increased in capital spending, 60% expect increased hiring. The Business Roundtable said those plans are reaching record highs.
Joshua Bolten, the president and CEO of the Business Roundtable, said, quote, "we can build on this momentum and sustain economic growth for decades to come by passing a bipartisan bill to upgrade the nation's infrastructure and forgoing harmful tax increases on US job creators that would hinder America's economic recovery." Now, bipartisan talks, they say, are key to the infrastructure package. They say that they are hopeful about those bipartisan talks that are happening in the Senate. They want that package to address physical infrastructure and things like broadband. Again, they say that is key to long-term economic growth.
They did warn against tax increases. Of course, the Biden administration wants to use corporate tax increases to fund the infrastructure package. And they say this uncertainty around the corporate tax rate could put a damper on businesses' plans for growth. The group did say there are some members that are having trouble finding workers, but Bolten said that they aren't pessimistic about this in the long term. They said once schools reopen in the fall, people become more confident about going back to work because of vaccines, and when those enhanced unemployment benefits expire, they expect more people going back to work.
The Raytheon CEO, who is a part of the Business Roundtable's leadership, did express some concerns over the rising cost of raw materials. They say they hope that the Fed is right that this would be temporary. And finally, this survey found that 75% of CEOs say the business conditions have already improved or are going to improve by the end of the year, they've gone back to pre-pandemic levels. Just 25% say that it would happen for them, they would recover sometime in 2022. And finally, the CEOs expect to see 5% GDP growth for the year. That is higher than their estimate last quarter. Alexis and Kristin.
- All right, thanks so much, Jessica Smith.
