Top executives at the nation’s major companies see steady economic growth ahead, the Business Roundtable’s latest survey shows.
CEOs foresee 2.9% growth in the gross domestic product this year, in line with the latest forecast by the President’s Council of Economic Advisers. It’s slightly more optimistic than the top end of the consensus view of private economists, who see growth in range of 2.3% to 2.8%.
The CEO Economic Outlook Index, which tracks how top executives believe the economy will perform in the next six months, rose three points from the fourth quarter 2006 to 84.9.
“I think the sentiment overall is that the economy is in good shape -- it’s very solid," Terry McGraw III, chairman of Business Roundtable and chairman, president and CEO of The McGraw-Hill Companies, told CNBC in an exclusive interview.
The CEO Economic Outlook Index combines the response on projected sales, capital spending and employment into an index that shows how top executives expect the U.S. economy to perform in the next six months. It’s a diffusion index centered on 50. So, anything above 50 indicates expansion and anything below suggests contraction.
The current index is well above the 50-70 range seen in late 2002 and early 2003 when the economy recovered from the last recession.
The survey has been conducted quarterly since the fourth quarter of 2002. The current survey was completed February 8-22 by 113 of the Roundtable’s 160 member companies.