Two-thirds of U.S. chief executives plan additional layoffs and expect sales to decline in the next six months as their confidence in the economy continues to fall, according to a survey released on Tuesday.
The Business Roundtable's quarterly CEO Economic Outlook Index fell to negative 5 -- the first negative reading in the survey's six-year history -- and down from a fourth-quarter reading of 16.5. A reading below 50 means CEOs expect economic contraction rather than growth.
The poll of 100 U.S. CEOs found they now expect real U.S. gross domestic product to decline 1.9 percent this year. That is below their December forecast, which anticipated flat GDP.
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According to the survey, 71 percent of the CEOs expect to cut their U.S. work forces over the next six months, and 66 percent expect to reduce capital spending. Lower sales are expected by 67 percent.
A few points:
1.) The survey has only been around 6 years. So when it say record low, realize the number doesn't even include data from the last recession.
2.) Employment -- while terrible -- is a lagging indicator; it drops at the end of the expansion and doesn't pick up until the recovery has started. That being said, graphs I posted yesterday showed that hours worked had dropped indicating the employment outlook is not good right now.
