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CORRECTED-UPDATE 1-US CEO confidence hits 3-year low-Roundtable
September 26, 2012 / 3:40 PM / 5 years ago

CORRECTED-UPDATE 1-US CEO confidence hits 3-year low-Roundtable

(Corrects to show decline was third-sharpest, not sharpest, in survey history, paragraph 2)

* 34 percent of CEOs expect to cut jobs in next six months

* View on capital spending, sales growth also weaken

* Concerns about U.S. fiscal cliff darken outlook

By Scott Malone

Sept 26 (Reuters) - 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, 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 third-sharpest drop recorded in the survey’s decade-long history

Confidence fell to its lowest point since the third quarter of 2009, when the United States had just emerged from its worst recession in 80 years. But the gauge but remained above the 50 mark separating growth from decline.

Thirty-four percent of the 138 U.S. CEOs surveyed expect to cut jobs in the United States over the next six months, up from 20 percent a quarter ago, while 30 percent plan to raise capital spending, down from 43 percent. Fifty-eight percent expect their sales to rise over that time period, down from the previous survey’s 75 percent.

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, JPMorgan Chase & Co and General Electric Co report quarterly results.

“These results reflect global demand flattening out, particularly in Europe and China, but also a number of domestic policy issues that could have an immediate negative impact on the economy,” said James McNerney, CEO of Boeing Co, who also serves as chairman of the Roundtable. “The so-called fiscal cliff and the uncertainty attendant to it certainly is cold water on long-term planning.”

The fiscal cliff is a reference to some $500 billion in expiring tax cuts and reductions in federal spending set to occur if lawmakers fail to reach an accord on cutting the nation’s budget deficit by Dec. 31.

The survey of CEOs, whose companies generate $7.3 trillion in annual revenue and employ some 16 million people, was conducted from Aug. 30 through Sept. 14. (Editing by Gerald E. McCormick and Steve Orlofsky)

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