(Reuters) — U.S. CEOs are somewhat more positive about the economy, including plans for hiring and capital spending over the next six months, although they expect only tepid growth this year, according to a quarterly survey by the Business Roundtable released on Tuesday.
The CEOs said gross domestic product would rise by 2.4 per cent in 2014, which is below-normal growth compared with past economic recoveries, according to the survey.
"CEO expectations for overall economic growth in 2014 continue to be modest at best," Randall Stephenson, chairman of the Business Roundtable and CEO of AT&T Inc, told reporters on a conference call.
He noted that a full recovery would show growth of at least four per cent.
"We're many years into this recovery now and still chugging along at a two (to) two-and-a-half per cent economic growth rate, which I think all of us — in business, in Congress, the administration — view as unacceptable," Stephenson said.
Of executives surveyed, 37 per cent expect to increase employment in the next six months, compared with 34 per cent a quarter ago, while fewer expected to decrease employment levels.
Forty-eight per cent of executives now expect to increase capital spending in the next six months, compared with 39 per cent in the prior survey.
The greater optimism for capital expenditures was encouraging, Stephenson noted, because "there's a very high correlation between private sector capital investment and sustained job growth."
Seventy-two per cent of CEOs expect sales to rise in the next six months, down from 73 per cent in the prior survey. But fewer expect sales to decline: five per cent vs. eight per cent in the earlier survey.
The Business Roundtable CEO Economic Outlook Index, a composite of top executives' expectations for sales, capital spending and employment for the next six months, rose to 92.1 from 84.5 in the fourth quarter of 2013. A reading above 50 indicates economic growth is expected.
The survey, conducted between Feb. 21 and March 7, had responses from 122 member CEOs.
The Business Roundtable, which advocates for public policy, has put at the top of its agenda pushing for corporate tax and immigration reform, as well as expanded trade agreements