The nation’s business leaders expressed the highest level of economic optimism in three years despite the obstacles facing President Trump’s legislative agenda, according to a new survey released Tuesday.
CEO projections for sales, capital spending and employment over the next six months rose to 93.9 in the second quarter, from 93.3 during the first three months of the year, the highest level since the April–June period of 2014, according to the latest Business Roundtable (BRT) report.
{mosads}Prospects for comprehensive tax and regulatory reform lifted CEO optimism through the spring, even though the White House has provided few details on its plans and Congress has yet to make much progress on tax legislation.
“Of course, whenever there are distractions from the agenda that we want to see accomplished in Washington, everybody’s concerned,” said Joshua Bolten, president and CEO of BRT, during a media call.
“But I’d be careful not to overstate that concern,” said Bolten, a former chief of staff to President George W. Bush.
“What the survey reflects is ongoing optimism about the prospect for ongoing regulatory reform, some of which is well placed in the pipeline, and prospects for serious tax reform,” he said.
Enacting tax reform legislation would spur businesses to increase hiring and capital spending, Bolten said.
Jamie Dimon, JPMorgan Chase chairman and CEO and BRT’s chairman, said, “The urgency of tax reform cannot be overstated.”
“We remain confident that Congress and the administration will coalesce around a plan that will achieve meaningful tax reform,” he said.
Republican lawmakers are concerned that the turmoil in the White House, especially the investigation into Russian meddling in the 2016 presidential election, will hobble the GOP’s hefty agenda.
Overall, though, CEOs are brimming with optimism.
CEO plans for capital investment rose by 4.6 points from the last quarter, while expectations for sales ticked up half a point.
Plans for hiring over the next six months fell 3.3 points after an 18-point surge in the first quarter as Trump took office.
With the unemployment rate standing at 4.3 percent in May, Bolten said there is still room to lower the rate, increase labor force participation and put upward pressure on wages while boosting productivity.
“Tax and regulatory reform make those things possible,” Bolten said.
The latest index is well above its historical average of 80.
CEOs lowered their expectations for growth down to 2 percent for the year, a two-tenths decline from the March estimate.