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 A survey by the Business Roundtable, released Tuesday, showed that most executives expect sales, capital investment and hiring to remain at current levels or even improve in the coming months.
While the economy's problems have caused consumer confidence to tank, the survey's results suggest that corporate executives' assessment is that the business climate remains generally healthy despite all the strains.
The economy, which logged its fastest growth in four years during the third quarter, is expected to slow to a pace of just 1.5 percent or less in the October through December period.
In the survey, 87 percent of chief executives said they expected their sales to hold steady or increase over the next six months. That's down only slightly from 88 percent in the previous survey in September.
On the hiring front, 78 percent said they expected to hold payrolls at current levels or boost them. That's up a bit from 74 percent in the earlier survey.
Meanwhile, 86 percent said they would hold capital investment steady or increase it. That compared with 85 percent in the previous survey.
One of the reasons behind executives' good outlook is that they expect overseas demand for their products and services to remain strong, said the group's chairman, Harold McGraw III, president and chief executive officer of The McGraw-Hill Companies. Another reason: executives are not seeing a retrenchment by U.S. consumers, McGraw said. Still, consumer behavior is being watched closely, he said, because it is a major shaper of overall economic activity in the United States.
Health care and energy topped executives' concerns about costs.
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 "For the last four consecutive years, health care costs, which impact virtually all Roundtable companies, have been cited as the top pressure. But now, with oil approaching $100 a barrel, energy costs have risen to the top concern in CEOs' minds," McGraw said.
For all of next year, the executives said they expect the economy to grow by 2.1 percent, which would mark slower growth than is forecast for this year.
Both the White House and the Federal Reserve have lowered their forecasts for economic growth next year because of fallout from the housing and credit markets. The housing slump is expected to drag on well into next year.
To prevent these problems from pushing the economy into a recession, the Federal Reserve has sliced a key interest rate twice this year. Fed Chairman Ben Bernanke hinted last week that another rate reduction could come when the central bank meets next Tuesday. The Fed's key rate, now at 4.50 percent, could be lowered by at least one-quarter percentage point, some analysts said.
The meltdown in the mortgage and credit markets have left millions of people at risk of losing their homes, made banks and other financial players to take huge losses and forced some lenders out of businesses. The mess is a political headache for the Bush administration and Congress and poses a big challenge to Fed policymakers.
The Business Roundtable is an association of CEOS of major corporations, representing a combined work force of more than 10 million employees and $4.5 trillion in annual revenues. The quarterly survey, conducted Nov. 5 through Nov. 20, was based on the responses of 105 of the group's 160 member companies.
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On the Net:
Business Roundtable: http://www.businessroundtable.org/
[Associated Press; By JEANNINE AVERSA]
Copyright 2007 The Associated Press. All rights reserved. This
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