CEOs’ Confidence in Economy Falls Amid COVID-19 Pandemic

Confidence among the nation’s CEOs in the future economic outlook plummeted in the second quarter, reflecting the acute effects of the coronavirus pandemic in the U.S., according to the latest Business Roundtable CEO Economic Outlook Index released this week. The index—a composite measure of CEO projections for sales, capital spending and hiring over the next six months—was down 38.4 points from the first quarter, falling to 34.3—the lowest reading since the second quarter of 2009.

All three components on the index decreased precipitously, falling well below historical averages. Less than half—45%—of CEOs said they expect sales to increase in the next six months. Forty-three percent said they expect their firm’s U.S. capital spending to decrease in the next six months, up from just 20% in the first quarter. Forty-six percent anticipated a decrease in their company’s U.S. employment. Overall, CEOs predicted a 3.8% contraction for the year, down 5.8 percentage points from the Q1 estimate of 2% growth. Most CEOs said they expect their companies to recover to pre-pandemic levels by the end of 2021.

CEOs were also asked a special series of questions on their response to the pandemic. All CEOs said they have adopted or plan to adopt physical distancing measures, and nearly all of them implemented new cleaning procedures. Additionally, almost all said they are promoting face coverings, encouraging sick employees to remain at home and adapting policies and practices to protect vulnerable employees. Ninety-five percent of CEOs expanded flexible work arrangements, and more than two-thirds said they have expanded wellness support and behavioral health services.