Confidence of U.S. leaders soars as vaccines and stimulants arrive
Confidence among large U.S. employers has risen over the past three months, as accelerating vaccine rollouts and Joe Biden’s $ 1.9 billion stimulus package combine to boost corporate willingness to hire and invest.
A quarterly survey CEOs of the Business Roundtable, Washington’s leading corporate lobby group, reported a 21-point jump in its economic outlook index since December. The index’s new reading of 107 is well above the 50 point level that indicates growth and the historical average of 82.
The rebound was “among the quickest and fastest recoveries of optimism in the history of our survey,” said Josh Bolten, chief executive of BRT, noting that it had taken eight quarters from the bottom of the crisis 2008-2009 financial year to bring the index back to a similar level of optimism.
The progress of the BRT survey follows other reports showing an increase in confidence in the US industry. National Association of Manufacturers reported On Tuesday, that optimism among its members had jumped in the last quarter from 74% to 88% – its highest rate in two years.
Readings suggest early vote of confidence in Biden administration despite lingering impatience for infrastructure spending and concerns about the prospect of higher corporate taxes and tighter regulations.
Bolten said BRT members were encouraged by their early dealings with the new administration. “Communication with the business community is good and the tone is good,” he said. But he warned that the progress of business investment and jobs over the past few years would be “compromised” if the cancellation of the 2017 corporate tax cuts made the United States uncompetitive by compared to other OECD countries.
Bolten expressed disappointment that the US $ 1.9 billion bailout did not attract bipartisan support, but expressed optimism that an infrastructure bill would attract support from both parties in Congress.
“We believe Congress and this administration can do it,” echoed Brendan Bechtel, chief executive of the eponymous engineering firm, who said it was “a once in a lifetime opportunity” to pass major infrastructure legislation. .
The survey showed that investments in traditional infrastructure and broadband networks were high on the CEOs’ priorities for Covid-19 recovery legislation. The BRT is pushing for a combination of federal investments in transportation, broadband and green infrastructure; a more streamlined authorization process; and measures to unlock private finance, including “user pays” models.
The increase in the BRT index was driven by a 30 point lead in measuring companies’ hiring plans for the next six months, signaling renewed optimism about employment prospects at large companies.
More than a third of CEOs surveyed said their business conditions had already recovered, while 38% expected a full recovery by the end of 2021.
The NAM survey contained notes of caution, indicating that higher raw material costs and the inability to attract and retain talent were the biggest challenges manufacturers currently face. NAM members expect raw material costs to rise 6.2 percent over the next 12 months – a record for the survey.