Jun 7, 2023 - Economy

Exclusive: CEOs increasingly foresee a "soft landing" for the economy

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

The breakneck pace of corporate hiring may slow in the coming months — but the overall economy remains solid. That's the takeaway from a new survey of America's leading chief executives shared first with Axios.

Why it matters: The view from the corporate suite — revealed in the Business Roundtable's quarterly CEO economic outlook survey — is of an economy that can come off its inflationary hot boil without the plunging sales and mass layoffs seen in recessions.

State of play: The overall index of CEO expectations edged down to 76, comfortably above 50 (the line between expansion and contraction) but below its long-term average of 84.

It's the underlying details that are more interesting:

  • The executives' expectations for sales were unchanged from Q1, and their capital spending plans actually ticked up. That's not what you expect to see in a recession.
  • Moreover, softer hiring plans weren't driven by rising enthusiasm for layoffs. The share of CEOs who expect their U.S. employment to decrease in the next six months was unchanged from Q1, at 27%.
  • Rather, fewer of the CEOs envision increasing their headcount — 33% now compared to 41% last quarter.

Between the lines: The era of businesses hiring every warm body they can find looks to be coming to an end. But top executives envision a period of muddling along with slow growth, rather than outright contraction.

  • They expect 1.5% GDP growth this year, a tick up from their expectation three months ago.

What they're saying: With a potential debt limit crisis averted in a manner unlikely to cause significant economic damage — just what business leaders wanted — they are turning their policy attention to things like negotiations over permitting reform to speed infrastructure and energy projections.

  • "Action by Congress and the Administration to raise the debt ceiling was a welcome signal from Washington that bipartisan agreement at a consequential moment is achievable,” says General Motors CEO and Business Roundtable chair Mary Barra.
  • "Business leaders stand ready to work with lawmakers to advance policies that strengthen the economy and American competitiveness."

The bottom line: After 18 months of nonstop recession chatter, a soft landing just may be in sight.

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