Chief executive officers' confidence in the economy rebounded in the first quarter, but they remained leery of taking on new workers at home, according to a survey released on Wednesday.
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The Business Roundtable's CEO Economic Outlook Index rose to 81.0 in March from 65.6 in December, according to the quarterly survey, which was conducted before the recent sharp rise in the U.S. stock market. Any number above 50 indicates growth.
Officials with the group, whose members employ about 16 million people, blamed the continued wariness about hiring on uncertainty in Washington, where President Barack Obama's Democrats and the Republicans who control the House of Representatives have been squabbling for two years without reaching an agreement on how to reduce the $16.7 trillion federal debt.
"We are discouraged that we can't resolve some of the issues ... that relate to the framework of the economy, which are tax, fiscal, budgetary considerations," said Boeing Co (NYSE:BA) CEO Jim McNerney, who chairs the Roundtable. "We keep lurching from one crisis to another there in D.C., which does put a little bit of a damper on investment, particularly long-term investment."
The CEOs' increased confidence reflected improved expectations for sales and plans to boost U.S. capital spending over the next six months.
But CEOs remained unlikely to add workers, with just 29 percent planning to boost U.S. employment over the next six months, the same percentage as in December. The slow recovery in hiring has been one of the biggest drags on the U.S. recovery from a recession that ended almost four years ago.
Some 72% of CEOs expect their companies' sales to rise in the next six months, up from 58 percent who expected that in December, and the percentage who plan to boost U.S. capital spending increased to 38% from 30%.
CEOs also modestly raised their expectations for growth in real U.S. gross domestic product, which they now expect to rise 2.1% this year, up from a 2.0% gain forecast in December.
The Roundtable surveyed 144 member CEOs from February 11 through March 1.