Survey: U.S. Chief Executives Cautious About Near-Term Economic Growth

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Survey: U.S. Chief Executives Cautious About Near-Term Economic Growth

THU, FEB 28, 2002

Chief executives of some of the United States' largest companies have a cautious view about the U.S. economy's near-term growth, but are more optimistic about future growth, according to a February survey released Wednesday.

Specifically, a big majority, 75 percent, of the executives surveyed said they believe the economy remains in recession today,but nearly the same number believe it will end this year. About half of the respondents said they believe the recession will end by mid-2002.

The survey was conducted by the Business Council, a voluntary association of chief executive officers from a broad range of large American companies. The organization did not say how many of its members participated in the survey, but more than 100 sitting and former chief executives attended the private Business Council winter meetings.

Of the surveyed executives, 77 percent expect the GDP growth of the U.S. will be 1.5 percent or less this year -- only slightly faster than 2001. However, 63 percent of respondents anticipate that growth in 2003 will be somewhat faster than 2002.

In assessing factors that will be most important in determining household spending trends, Business Council members consider wage growth and the unemployment rate are by far the most important influences, followed by interest rates, tax policy and inflation. Wealth effects, including house and equity prices, are viewed as less important. Government spending is ranked low as an influence on household behavior.

Executives' views about the international economic outlook were restrained, the Business Council said. Eighty-one percent of the respondents anticipate that growth outside the U.S. this year will be slower or similar to that of last year. Expectations about the Japanese economy were particularly downbeat, with 71 percent anticipating that the world's second-largest economy will remain in recession this year.

Moreover, most respondents do not anticipate any improvement from Japanese structural reform policies this year. Even next year,most executives expect Japanese growth will not exceed one percent.

Meanwhile, members foresee strongest growth in the Asia-Pacific region with the exception of Japan, and in Mexico and Europe over the next five years, followed by Canada.

Editor:Zhong Source:Xinhua

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