WASHINGTON, June 13 (Xinhua) -- Business executives in the United States have lowered their expectations for hiring, investment and sales in the second quarter of this year, citing uncertainty in global trade, according to a recent survey.
The CEO Economic Outlook Index, a gauge of business confidence of big U.S. corporations issued quarterly by the Washington-based Business Roundtable, decreased 5.7 points in the second quarter to a value of 89.5.
The survey results, published Wednesday, showed that CEO plans for hiring decreased 5.2 points to 75.2, plans for capital investment dropped 2.9 points to 88.1, and expectations for sales slumped 8.9 points to 105.1.
As for the overall U.S. economy, the 127 CEOs who completed the survey projected a 2.6 percent growth of the gross domestic product in 2019, 0.1 percentage point higher than the estimate made in the previous quarter.
Jamie Dimon, chairman and CEO of JPMorgan Chase & Co. and chairman of Business Roundtable, said that "uncertainty about U.S. trade policy, softening global growth conditions and inaction on other pressing public policy issues are a concern."
He urged the U.S. Congress and the Trump administration to "enact policies that will encourage inclusive growth, innovation and opportunity in the United States." Those policies, he said, include investment in infrastructure and workforce training, immigration reform, as well as trade expansion.
Noting that the latest survey came "during a turbulent few weeks for U.S. trade relations with China and Mexico," Business Roundtable President and CEO Joshua Bolten said although U.S. companies are "ready and eager" to invest and hire domestically, "the uncertainty over trade policy is making it more difficult for companies to invest and operate confidently."
The global trade tensions triggered by the United States are expected to backlash particularly on U.S. companies that have higher global exposure.
"With a few weeks remaining in the second quarter, there are concerns in the market about the impact of trade tensions and slower global economic growth on companies in the S&P 500 with higher international revenue exposure," Norwalk, Connecticut-based financial data provider Factset said in its Earnings Insight report released June 7.
According to Factset's estimates, S&P 500 companies that generate more than half of their sales outside the U.S. market will see a decline of 9.3 percent in their second quarter earnings.
On the revenue side, those companies will have to prepare themselves for a 1.2 percent decrease, Factset said.
Earnings growth of all S&P 500 companies is projected to be a negative 2.3 percent in the second quarter.
"If -2.3% is the actual decline for the quarter, it will mark the first time the index has reported two straight quarters of year-over-year declines in earnings since Q1 2016 and Q2 2016," Factset said.
