CEOs See Recession Easing But Still Cut Jobs, Spending

US chief executives took a slightly less grim view of the economy in the second quarter, but still plan to cut jobs and capital spending, according to a Business Roundtable survey released Tuesday.

CNBC.com

The quarterly CEO Economic Outlook Index rebounded to 18.5 in the second quarter from a record low of negative 5 in the first quarter. But it was still the third-lowest reading in the survey's six-year history.

A reading below 50 means CEOs expect economic contraction rather than growth.

"What we basically see is more visibility in that we don't see us in continued free fall," said Ivan Seidenberg, chairman and CEO of phone company Verizon Communications and chairman of Business Roundtable. "The signs appear less negative than they were last quarter, but no one is ready to suggest they are going to begin hiring to start growth."

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Corporate chieftains still plan to cut costs for the next six months, with 51 percent intending to reduce capital spending and 49 percent expecting to cut U.S. jobs. Forty-six percent anticipate a decline in sales.

Those plans indicated a less grim outlook than in April, when two-thirds of CEOs were planning to cut jobs and capital spending.

Member CEOs expect real U.S. gross domestic product to decline by 2.1 percent in 2009, a sharper contraction than the 1.9 percent forecast in the first quarter.

Investors also appear to believe that the worst of the downturn is behind them. The broad Standard & Poor's 500 index has risen by roughly 34 percent from the 12-year low it hit in March.

Business Roundtable member companies, who were surveyed June 1-12, together employ almost 10 million people and generate $5 trillion in annual revenue.

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