U.S. chief executives' view of the economy deteriorated sharply in the third quarter and is now as bleak as it was in the immediate aftermath of the last recession, with more planning to cut jobs over the next six months, according to a survey released by the Business Roundtable on Wednesday.
The group's CEO Economic Outlook Index tumbled to 66 in the third quarter from 89.1 in the second, in the sharpest drop recorded in the survey's decade-long history. Confidence fell to its lowest point since the third quarter of 2009, when the U.S. had just emerged from its worst recession in 80 years, but remained above the 50 mark separating growth from decline.
Thirty-four percent of U.S. CEOs expect to cut jobs in the United States over the next six months, up from 20% a quarter ago, while 30% plan to raise capital spending, down from 43%. Fifty-eight percent expect their sales to rise over that time period, down from the previous survey's 75%.
The survey comes less than two months ahead of the U.S. presidential election, in which the weak economy and stubbornly high unemployment are shaping up to be key elements in voters' choice between incumbent Democratic President Barack Obama and Republican challenger Mitt Romney. Investors will get a more detailed look at corporate confidence next month when top U.S. companies including Alcoa Inc (NYSE:AA), JPMorgan Chase & Co (NYYSE:JPM) and General Electric Co (NYSE:GE) report quarterly results.
The survey of 138 CEOs was conducted from August 30 through September 14.