CEOs see strength in economy ahead

By Simon Kennedy
Bloomberg News Service

U.S. chief executive officers are the most optimistic they've been in a year, according to a survey by the Business Roundtable, a 150-member association of company leaders.

The group's economic outlook index rose to 89.6 in the fourth quarter, the highest since the gauge's inception in the fourth quarter of 2002, from 67.7 in the third quarter. Ninety-three percent of CEOs expected higher sales in the next six months, the survey found.

"CEOs are clearly optimistic that the U.S. economy will continue to strengthen," said Hank A. McKinnell, chief executive of Pfizer Inc. and the association's chairman, in a press release.

Half of the executives polled said they didn't plan to change their payrolls in the next six months with the remainder split equally between cutting and increasing them. Fifty-nine percent said they had no plans to change their capital spending over the same time frame, with 35 percent predicting an increase.

The CEOs project that the economy will grow 3.6 percent in 2004, lower than the 4.4 percent anticipated by the median estimate of economists surveyed by Bloomberg News Service this month.

The business community is concerned about rising costs, with almost 58 percent of the CEOs complaining of rising health costs and 24 percent identifying litigation costs as a problem.

Combined, the companies surveyed have more than 10 million workers and have total sales of $3.7 trillion. Of those polled, 120 responded.