The Economy: CEOs Are Down on Economy But Upbeat About Their Firms
WHITE SULPHUR SPRINGS, W. Va. -- Chief executives of some of the nation's largest corporations anticipate slower growth for the economy next year and beyond, but are a bit more upbeat about their own companies' outlooks.</br></br>While a lapse back into recession isn't expected, the survey of about 75 CEOs, released yesterday by the Business Council, offered a fairly downbeat assessment for the economy over the next decade.</br></br>For example, 65% of the chief executives predicted the U.S. economy would grow between 1.5% and 3% in 2003, down from the 3.2% annual growth rate in gross domestic product recorded during the first half of this year. They aren't much more optimistic about growth for the next 10 years, with most expecting an average annual pace of 2% to 3%, compared with an average of 3.5% over the past decade.</br></br>For their own firms, slightly more than half of the executives predicted sales growth would accelerate "somewhat," though 18% anticipated either slowing growth or sales declines next year. Many said their companies' profit margins would be stable (43% of respondents) or improve (38%) in the coming year. They are less optimistic about being able to raise prices: Less than one-quarter of participants expected their firms' pricing power to increase.</br></br>Moreover, the executives said the souring stock market is making them hesitant. Half of the respondents said the weak markets have caused them to delay or alter business plans. Nearly a third said their firms' long-term strategies have changed because of weak markets.