CEOs of major U.S. companies expect to hire fewer people and invest less in the next six months because of uncertainty surrounding the so-called fiscal cliff.
The automatic tax increases and across-the-board spending cuts that could take effect next year throw “cold water on long term planning,” said W. James McNerney, CEO of Boeing and Business Roundtable board chairman.
CEO economic expectations are at their lowest level since the third quarter of 2009, according to a survey conducted by the Business Roundtable, a lobbying group of CEOs of top companies such as Honeywell International, Dow Chemical, Xerox and General Electric.
Only 29 percent of CEOs said they expect to hire more employees in the next six months, down from 36 percent in the last quarter. Company leaders are also cutting back on capital spending plans: just 30 percent expected to increase spending, compared to 43 percent last quarter.
Congress has until the midnight of Dec. 31 to act to prevent a series of tax cuts from expiring and to stop funding cuts to hundreds of federal programs.
CEOs don’t want Congress to delay the cuts by a few months either, which would only prolong economic “purgatory,” said McNerney. The group is urging Congress to use the Bowles-Simpson plan as a guide.
