U.S. chief executive officers are modestly more upbeat about the economy and almost half plan to increase capital spending over the next six months, a quarterly business group survey said on Tuesday.
CEOs expect U.S. gross domestic product to rise by 2.8 percent this year, compared to a projection of a 2.4 percent increase a quarter earlier, according to the first-quarter survey by the Business Roundtable.
Of the 120 CEOs who responded to the survey, 45 percent expect to boost U.S. capital spending in the next six months, up from 36 percent in the fourth-quarter survey. Forty percent expect to increase U.S. employment, about the same level as in the prior survey.
"The U.S. economy and the job outlook are starting the year in a stronger position than 2014," said Randall Stephenson, chairman of Business Roundtable and CEO of AT&T Inc (T.N).
Passage of tax-extender legislation late last year gave companies greater confidence to invest, Stephenson said.
"There's just one little microcosm of how tax policy is influencing how CEOs think about investing in the U.S. economy," Stephenson told reporters on a conference call. "There is probably nothing that will move this economy forward and drive capital investment faster than tax reform."
In response to a question about foreign trade, 81 percent said the ability to sell more goods and services to foreign markets would help their company grow and be more competitive globally. Fifty-four percent said such an ability would allow them to hire more U.S. workers.
Trade issues are "ripe" for bipartisan cooperation among legislators, Stephenson told reporters.
The Business Roundtable CEO Economic Outlook Index, a composite index of expectations for the next six months for sales, capital spending and employment, rose to 90.8 from 85.1 in the fourth quarter. The long-term average of the index is 80.5, and the index has generally ranged from about 85 to 95 since the fourth quarter of 2013.
Eighty percent said they expected their companies' U.S. sales will increase in the next six months, up from 74 percent a quarter ago. Eight percent expect U.S. sales to decline.
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