By Ian McKendry

WASHINGTON (MNI) – Chief executives at the largest U.S. firms have
lowered their outlook for economic growth in the third quarter, and so
expect to invest less in hiring and capital over the next six months as
they anticipate slower sales, a survey released by the Business
Roundtable indicated Wednesday.

The Business Roundtable survey, which rounded up responses from 138
member CEO’s between August 30 and September 14 said members estimate
the economy will grow by 1.9% in 2012, which is down from their 2.1%
estimate in the second quarter.

“When you are below 2% in anticipated growth you are not adding
jobs and I think that is the situation a lot of companies are finding
themselves in,” Jim McNerney, the CEO of Boeing and Chairman of the BRT
said on a conference call with reporters following the survey’s release.

McNerney said CEO’s are still fearful of the “fiscal cliff,”
sequestration and a global economic slowdown.

“I think some clarity on both the fiscal situation in Europe which
is rooted in sovereign debt and the banks and some clarity in the US tax
and the issues around the fiscal cliff will help a lot,” McNerney told
reporters.

“Hopefully after the election in the U.S. there will be an
impetuous to resolve some of these things that have been unresolvable, I
think those two things will help a lot,” McNerney added.

The survey asked CEOs how they view their sales, capital spending
and change in employment over the next six months.

The survey found that only 58% of respondents think their sales
will increase compared to 75% in the second quarter, 30% said they think
they will increase capital spending compared to 43% in the second and
29% expect to add employees compared to the previous 36%.

The net result of the responses lowered the BRT CEO Outlook Survey
Index to 66.0 from 89.1, the lowest reading since the third quarter of
2009 and the third largest single quarter drop in the survey’s history.

“This quarters outlook survey reflects a pretty significant
downturn in expectations,” McNerney said.

Despite the gloomy survey results, McNerney was still optimistic
about the United States’ potential for economic growth once the fiscal
cliff headwinds and European debt crisis subside, adding that he felt
the fiscal cliff issues have more of an impact on employment and
investment while the foreign debt crisis weighs more on sales.

When asked how the BRT would feel about raising revenues to resolve
the U.S. fiscal issues, McNerney said BRT members are “pragmatic” and
“recognize there is some case for revenue raisers”

“We would be comfortable somewhere in the Simpson-Bowles range,”
McNerney said, adding that the Simpson-Bowles proposal was framed around
a ratio of 3:1 ratio of budget cuts to revenue raisers.

“We would shade toward more cuts in the debate and others might
shade toward more revenue but this complete Mexican standoff we have
right now is not getting us anywhere.”

The BRT is an association of CEO’s for US companies with over $6
trillion in annual revenues and more than 14 million employees

** MNI Washington Bureau: 202-371-2121 **

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