A new study shows that the economic outlook from American CEOs has reached its lowest point in two years, as the economy continues to face numerous challenges that could still lead to a major recession in the coming years.
According to CNN, the Business Roundtable released its CEO Economic Outlook Index on Monday, revealing that it had fallen during the fourth quarter of 2022. The index is a composite of CEOs’ plans for business investment, hiring, and sales expectations. Having fallen gradually in every quarter of 2022, the index one year ago stood at 124; today, it stands at just 73.
“The results signal CEOs remain cautious amid persistent domestic and global economic headwinds,” the Business Roundtable said in a statement released after the latest findings, “including high inflation and the Fed measures required to tame it.”
The CEOs surveyed by Business Roundtable now say that the expect growth next year to be no greater than 1.2 percent, down from almost 6 percent in 2021. When it came to the leading causes of such economic pessimism, 49 percent of CEOs said it came down to labor costs; 15 percent cited material costs, and another 14 percent pointed to supply chain disruptions.
“With continued supply chain challenges and inflation uncertainty, many CEOs remain cautious about domestic plans and expectations for the next six months,” said Mary Berra, the CEO of GM and chair of the Business Roundtable.
Ever since inflation began drastically rising in early 2022, the Federal Reserve has repeatedly raised interest rates, which has led to higher borrowing costs for businesses and individuals, which itself risks an economic collapse.