CEOs haven’t felt this gloomy about the economy since the pandemic

CEOs aren’t feeling too hot about the economy.

The Business Roundtable’s CEO Economic Outlook Index dropped by 15 points in the second quarter to 69, marking its lowest level since 2020 and well below its historic average of 83. A total of 169 CEOs participated in the survey, which was conducted between June 2 and June 13.

“The quarter’s survey results signal that Business Roundtable CEOs are approaching the next six months with caution,” Cisco CEO and Business Roundtable chair Chuck Robbins said in a release accompanying the results.

The survey assesses three categories: capital spending plans, hiring intentions, and sales expectations. Hiring plans saw the steepest decline this quarter, dropping 19 points. Capital investment plans followed with a 15-point decrease, and sales expectations fell by 11 points.

The survey indicates that 41% of CEOs surveyed expect their company to decrease employment in the next six months, compared to 29% last quarter. The percentage of CEOs surveyed who expected hiring to increase in the next six months also dropped quarter over quarter, from 33% to 26%.

It’s the latest indication of a challenging job market, as many companies have made moves to flatten their org charts and slow hiring. A number of major companies have conducted layoffs this year, including Meta, Microsoft, BlackRock, and Intel. Other companies, like Salesforce, have announced a pause on hiring engineers.

Business Roundtable CEO Joshua Bolten said the quarterly decline was driven by “broad-based uncertainty,” stemming from an “unpredictable trade policy environment.” The CEO said expanding tax reform is important but will not solve the issue on its own.

“American businesses also need the Administration rapidly to secure deals with our trading partners that open markets, remove harmful tariffs and provide certainty for investment,” Bolten said.

President Donald Trump’s tariff threats have taken consumers and businesses on a roller coaster ride over the last few months. While some tariffs were enacted in April, the bulk of new tariffs have been paused until July to allow time for negotiations. The ups and downs have resulted in sharp stock market swings, led some companies to make tweaks to their supply chains, and impacted retail and food service sales as well as the outlook on home sales.

Uncertainty around tariffs has made long-term planning difficult for many companies. The Federal Reserve’s Beige Book, released this month, indicated that half of the districts saw “slight to moderate” declines in economic activity, while three reported no growth at all.

The Trump administration has said that tariff policies are in the best interest of the US, even if they create some short-term pain.

While the report paints a largely gloomy picture of CEO sentiment, it’s not at levels previously seen during the last recession. The Business Roundtable states that “readings at 50 or above indicate economic expansion,” while readings below indicate a recession. In the second quarter of 2020, the economic outlook plummeted to an overall Index of 34.3, and quickly rebounded to 64 in the next quarter.

However, the survey adds to a growing chorus of CEOs who are voicing concern for the near future as they navigate a choppy economic environment.

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