CEOs think the economy is below its potential: Study

Providing yet another sign the economy still has room for improvement, the Business Roundtable released a survey on Tuesday finding that CEO expectations on the economy remain mixed for the fourth-straight quarter.

The Business Roundtable CEO Economic Outlook Index, which looks at CEO projections for sales and plans for capital spending and hiring over the next six months, increased modestly from 67.5 in the fourth quarter of 2015 to 69.4 in the first quarter of 2016. The index remains near three-year lows.

The survey found that CEO expectations for sales over the next six months increased by 8.5 points, and their plans for capital expenditures increased by 7.1 points, relative to last quarter. Hiring plans declined by nearly 10 points from last quarter.

CEOs were also asked in this quarter's survey how the enactment of the Trans-Pacific Partnership (TPP) would affect their companies. In their responses, a majority said the TPP would have a positive effect on their ability to "grow my company and become more globally competitive" and to "expand U.S. operations."

The survey for the first quarter of 2016 was completed between Feb. 10 and March 2. Responses were received from 141 member CEOs from the association, which represent companies with approximately $7 trillion in annual revenues and nearly 16 million employees.

"Mixed expectations for near-term sales, investment, hiring and growth point to an economy that continues to lack momentum," Doug Oberhelman, chairman and chief executive officer of Caterpillar and chairman of Business Roundtable, said in the report. "These results only reinforce the need for Congress and the Administration to act this year to enact policies that boost job creation and economic growth, such as quickly ratifying the TPP, modernizing America's outdated business tax system, and embracing a smart regulatory environment."