Tax Revamp Drives Corporate CEOs' Economic Outlook to 15-Year High
March 13 2018 - 01:18PM
Dow Jones News
By Sarah Chaney
Chief executives of America's largest companies raised their
outlook for spending, hiring and sales to the highest level in 15
years in the first quarter following the passage of the new U.S.
tax law.
The Business Roundtable CEO Economic Outlook Index--a composite
of CEO plans for capital spending, hiring and projections for sales
over the next six months--reached its highest level in the survey's
history.
Executives also boosted their projection for 2018
gross-domestic-product growth, predicting growth at a 2.8% rate
compared with an earlier estimate of 2.5%.
The survey marks the first the Business Roundtable has conducted
since the U.S. tax-code overhaul passed in December. The law
included many provisions the Business Roundtable supported, such as
a much lower corporate tax rate and lighter taxes on many U.S.
companies' foreign earnings.
James Dimon, chairman of the Business Roundtable and CEO of
JPMorgan Chase & Co., said the survey results should translate
into more jobs for Americans.
"The historic tax-reform law is already prompting more
investment, jobs, high wages and more benefits for workers all here
in the United States of America," Mr. Dimon said.
In the first quarter, the share of firms planning to increase
staff over the next six months rose to 61% from 43% in the fourth
quarter, while the share of companies planning to ramp up capital
investment increased to 68% from 49%. The share expecting sales to
increase also shot up to 93% this quarter from 76%.
The survey of 137 chief executives at large U.S. businesses was
conducted between Feb. 7 and Feb. 26. Joshua Bolten, Business
Roundtable president and CEO, noted this was before the Trump
Administration's announcement of tariffs on steel and aluminum -- a
policy that conflicts with the Business Roundtable's position in
favor of trade negotiations that lower tariffs around the
world.
"Missteps on important elements of U.S. trade policy will
undermine great economic progress that's been realized so far from
tax reform and regulatory relief, perhaps even reverse it," Mr.
Bolten said.
Small-business owners also responded positively to tax changes,
with optimism rising in February, according to a report Tuesday.
More owners say they are increasing capital outlays and raising
compensation.
The National Federation of Independent Business' Small Business
Optimism Index rose from January to 107.6. It was the
second-highest level in the measure's 45-year reading, second only
to a 180.0 reading in 1983.
"Small-business owners are telling us loud and clear that
they're optimistic, ready to hire and prepared to raise wages,"
NFIB chief economist Bill Dunkelberg said.
--Cara Lombardo contributed to this article.
Write to Sarah Chaney at sarah.chaney@wsj.com
(END) Dow Jones Newswires
March 13, 2018 14:03 ET (18:03 GMT)
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