By Liz Moyer
Investing.com -- CEOs are getting more pessimistic about the economic outlook.
The Business Roundtable’s said its index measuring CEO plans for capital spending, jobs and sales expectations is down 11 points since the third quarter and has dipped below its long-term average for the first time since the third quarter 2020.
And in their first guess at economic output for 2023, the CEOs in the survey forecast 1.2% GDP growth for the year, the Business Roundtable said.
The lobbying group represents CEOs from a variety of business sectors, but it wasn’t the only news out on pessimistic outlooks. The National Association for Business Economics' December 2022 survey of 51 forecasters said there’s a more than 50% probability of a recession in 2023.
The mood was perhaps reflected in the performance of bank stocks for the day, with the SPDR® S&P Bank ETF (NYSE:KBE) down nearly 5% and stocks of banks like Goldman Sachs Group Inc (NYSE:GS) down 2.4% and JPMorgan Chase & Co (NYSE:JPM) down 2.8%.
In the fourth quarter Business Roundtable outlook, plans for capital spending fell 7 points, plans for hiring fell 17 points, and expectations for sales also fell 8 points.
“This quarter’s results reflect a softening economy that has tempered CEO plans and expectations for the next six months,” Business Roundtable said. “The results signal CEOs remain cautious amid persistent domestic and global economic headwinds, including high inflation and the Fed measures required to tame it.”
Every year the survey asks CEOs to identify their biggest cost pressure when it comes time for the fourth quarter outlook. This year, 49% identified labor costs as the top cost pressure, followed by 15% who identified material costs and 14% who identified supply chain disruption costs, the survey said.