CEOs offer mixed picture of economy as election looms

The nation’s top executives are slightly more optimistic about the immediate future of the U.S. economy but recognize that challenges loom on the horizon.

A new survey out Wednesday from the Business Roundtable found that its member CEOs expect to spend a little more and sell a little more in the coming six months. However, hiring expectations remain flat, and the survey found expectations for the overall economy are on the decline.

{mosads}The association’s CEO Economic Outlook Index rose slightly in the second quarter to 73.5, up from the 69.4 recorded in the first quarter.

Anything above a 50 indicates CEOs believe the economy is expanding, but Roundtable officials noted that Wednesday’s number was still below its historical average of 79.8.

“We can and should be doing much better,” said Douglas Oberhelman, the CEO of Caterpillar and the Roundtable’s chairman.

So far, the Roundtable, which represents some of the biggest companies in the world, says the looming presidential election does not appear to be weighing significantly on economic expectations. But that could change in the coming months as the general election picture becomes clear.

“We have not … picked up yet much noise around the election,” said Oberhelman. “It’s only clarified in the last couple of weeks who the candidates will be.”

The Roundtable said it would continue to be aggressive in the coming months to push for the ratification of the Trans-Pacific Partnership. The broad trade deal has earned criticism from both presumptive presidential nominees, Hillary Clinton and Donald Trump, but President Obama and Republican leaders are hoping to see it finalized before the president leaves office.

“Every effort is being made,” said John Engler, the group’s president. “This is kind of the leading issue that business has this year, and we’re doing all we can.”

On the election front, Engler added that the Roundtable has been in talks with both the Clinton and Trump campaigns, underlining the group’s priorities for the next president.

“The next president is going to get elected, and they’re going to have an economy that’s relatively weak,” he said. “They’re going to need an economic agenda ready right out of the gate.”

In its latest CEO survey, the Roundtable found that 68 percent of companies expect their sales to increase over the next six months, while another 37 percent expect to boost capital spending. Both of those are modest increases from the group’s first-quarter report.

However, hiring expectations held flat, with 29 percent again reporting plans to boost hiring in the coming months. And CEOs now expect the economy will grow just 2.1 percent in 2016, down from 2.2 percent expectations earlier this year.