Weak economy to continue, say ceos
Staff Staff -- Home Textiles Today, April 28, 2003
U.S. corporate leaders anticipate the economy will weaken even further from last year's low levels, forcing them to cut capital spending and trim payrolls over the next six months.
The Business Roundtable said business leaders now expect U.S. Gross Domestic Product to improve by just 2.2 percent this year, somewhat slower than the tepid growth rate of 2.4 percent recorded in 2002. Members of the Business Roundtable represent companies with a combined work force of about 10 million, and annual sales of $3.7 trillion.
About 56 percent of the companies canvassed said they expect sales to rise in the next six months, but few plan to hire new workers. Indeed, just nine percent said they plan to add staff, while 45 percent said they plan layoffs.
"This survey reflects that ceos are more concerned about the weakness in the economy than they were six months ago," commented John Dillon, chairman of the group and ceo of International Paper.
As well as cutting staff, companies plan to cut their budgets for capital improvements. The survey showed 27 percent plan to reduce investment spending over the next six months, while only 18 percent plan increases.