UPDATE 2-Corporate America taking grimmer view of economy

Wed Jun 18, 2008 7:12pm BST
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(Recasts, adds Duke University/CFO Magazine survey)

By Scott Malone

BOSTON, June 18 (Reuters) - Corporate America's view of the U.S. economy has grown bleaker, weighed down by surging energy prices, a credit crunch and the worst housing slump in decades, according to two surveys released on Wednesday.

The polls showed the anxiety about the economy that has already spooked Wall Street -- the Standard & Poor's 500 index .SPX is down 9 per cent this year -- has spread to the corner offices of chief executives and chief financial officers, who expect to cut jobs to cope with rising costs.

The Business Roundtable's quarterly CEO Economic Outlook Index tumbled five points to 74.5, its lowest level since October 2003.

"Clearly, we've got a more gloomy scenario" than in the first quarter, said Harold McGraw, chairman of both publisher McGraw-Hill Cos Inc (MHP.N: Quote, Profile, Research) and the Roundtable.

"People are being very cautious, very cost-control oriented," McGraw told reporters on a conference call. "It's just the confluence of a lot of things that make people somewhat fearful."

The drop in the CEO index was the sharpest in almost two years. In September 2006 it tumbled 16.2 points to 82.4. Any reading above 50 indicates growth.

The survey found CEOs had also cut their forecast for overall U.S. economic growth. They now expect gross domestic product to rise 1.3 percent in 2008, down from a prior forecast of 1.5 percent.   Continued...

 
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