America’s corporate leaders are profoundly more pessimistic this fall about prospects for the U.S. economy and their own profitability than they were this spring, according to a survey of CEO sentiment released on Thursday.
The Business Council, a group that counts 150 chief executives of the largest U.S. corporations as its members, said that only a third of the CEOs who participated in its latest survey believe their own industry will improve over the next six months — down from two-thirds back in May, when it last polled them.
“After sharp and continuous improvements in business confidence during the past 18 months, the current survey indicates that members of The Business Council believe the acceleration phase of the recovery is over,” the group said.
On the outlook for the broader U.S. economy, the CEOs are almost evenly split, with about half predicting it will grow between 2.1 percent and 3.0 percent between now and the end of the year and the other half saying it could be somewhere between 0.1 percent and 2.0 percent.
U.S. GDP grew at an annual rate of 1.7 percent in the second quarter. That’s slower than the first-quarter GDP growth rate of 3.7 percent on an annualized basis.
In a separate question, a more pessimistic consensus seemed to emerge with more than three quarters of the CEOs expressing “some hesitancy” about the ability of the U.S. economy to continue to grow at all.
The Business Council said the results did not mean the U.S. economy was headed back into a recession. But it said its members believed 2011 would be very similar to 2010 in terms of overall economic growth.
Nearly 27 million Americans are either out of work, underemployed or too discouraged to even look for work, according to the U.S. Labor Department.
Indeed, 80 percent of the CEOs who answered the survey said they believed the U.S. jobless rate — which was 9.6 percent in September — will be 9.1 percent or higher through next June.
Corporate profits, which rebounded quickly in many sectors following the recession, are expected to slow in 2011 as the overseas growth that helped offset lingering weakness in Europe and North America moderates, according to the survey.
In an introduction to the survey, Jamie Dimon, the chief executive officer of JPMorgan Chase and the Business Council’s vice chairman, writes: “The momentum in the U.S. and global economy evident in recent surveys has subsided.”
