Updated Mar 15, 2023 - Economy

Survey: CEO optimism was on the rise before Silicon Valley Bank meltdown

Business Roundtable CEO Economic Outlook Index
Data: Business Roundtable; Chart: Axios Visuals

Corporate America started the year slightly more optimistic about the economy, and had plans to hire and spend at rates that would keep growth humming, according to a survey of more than 100 chief executives of America's biggest companies by the Business Roundtable (BRT).

Why it matters: Executives' outlook suggests the U.S. is not plunging into a recession. But it does imply slow growth and wariness around hiring, sales and capital spending.

  • That aligns with what other data is showing. Hiring is strong, and economic activity is still holding up. But the risks that may ultimately emerge from the Fed's aggressive tightening campaign to whip high inflation may be only starting to become apparent.
  • However, CEOs were polled before the Silicon Valley Bank meltdown. It is too early to say whether the banking troubles will result in constrained credit or a broader loss of business confidence.

What they're saying: "This quarter's survey reflects continued caution resulting from high inflation and the policy measures the Federal Reserve is implementing to bring it under control," said Mary Barra, General Motors CEO and BRT chair, in a statement.

By the numbers: The latest CEO Economic Outlook Index, compiled by Business Roundtable, rose 6 points. That modest uptick is the first increase since the final quarter of 2021.

  • The CEOs expected the economy to grow 1.4% this year, below the long-term trend in the U.S., but not the kind of contraction you would expect to see in a recession.
  • Sub-indices that measure expectations for hiring and company sales over the next six months edged up. Some 68% of the CEOs expect higher sales this year, compared to 62% in late 2022.
  • A gauge of capital spending plans dipped slightly.

Where it stands: CEOs were polled between Feb. 8 and March 8, a period that included a run of hot data showing strong jobs and consumer spending figures, and more persistent inflation pressures.

The bottom line: For now, CEOs are not slamming the brakes on the type of activity that underpins the economy, including hiring and capital investments. But the survey suggests they are moving more prudently as a slew of risks — including a potential debt ceiling battle — loom.

  • "While the U.S. economy remains resilient, CEOs are cautiously approaching the next six months," said Joshua Bolten, the BRT's CEO, in a statement.
  • "Our members have been clear that the full faith and credit of the United States should not be put at risk and that we should take steps to address growing deficits and debt."

Editor's note: This story was updated with additional details.

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