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 email@example.com
(END) Dow Jones Newswires
March 13, 2018 14:03 ET (18:03 GMT)
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