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CEO Survey Shows Continued Strengthening of Business Conditions
WASHINGTON -- Business Roundtable's June 2004 CEO Economic Outlook Survey shows that America's leading chief executives expect continued strengthening of the U.S. economy, with projections for an increase in hiring plans, further gains in capital spending and a still-high level of expected sales."America's CEOs believe that the U.S. economy will continue to strengthen steadily over the next six months," said Hank McKinnell, chairman of Business Roundtable and chairman and CEO of Pfizer Inc. "Along with a continued rise in capital spending and a high level of sales, CEOs expect steady employment gains over the next six months. Our economy appears to have reached a self- sustaining phase of expansion."Fully 88% of CEOs surveyed expect to see an increase in their companies' sales over the next six months, and just 4% are projecting a decrease. When it comes to U.S. capital spending over the next six months, 44% plan an increase and 49% expect no change. Employment projections are more mixed, with 38% projecting new hires, 43% expecting no change and 19% foreseeing a reduction in the work force.Other survey findings include:On average, CEOs expect real Gross Domestic Product growth to be 3.7% in 2004, which is in line with the projection made in March. By comparison, the average annual U.S. GDP growth in 2003 was 3.1%.Employment projections continue to expand, with 38% projecting job increases in the next six months -- an increase over the 33% in December."The steady growth that our CEOs have projected in the past two surveys is closely aligned with what we've been seeing in official economic data," said McKinnell.The June survey is the second in a row since the CEO survey began in the fall of 2002 in which a larger percentage of CEOs are projecting their companies will add jobs than are expecting employment declines. The June survey showed that 81% of CEOs projected that employment at their companies will increase or remain the same in the next six months; that number was 78% in March. These are the highest levels since the survey began, and remarkably higher than the 58% figure projected nearly a year ago in July 2003."In addition to the job growth projections of our survey, it is also important to note that official Bureau of Labor Statistics data shows a depth and breadth to the hiring that is taking place," added McKinnell. "The official data shows major gains in professional and business services; a fast- growing Internet-content producing sector; and manufacturing job growth for the first time in 41 consecutive months."The CEOs' economic projections led to another increase in the Roundtable's CEO Economic Outlook Index to 96.5%, up from 94% in the last survey (March 2003).Business Roundtable is an association of chief executive officers of leading corporations with a combined workforce of more than 10 million employees in the United States and $3.7 trillion in annual revenues. Visit the Business Roundtable: www.businessroundtable.org"