An increasing number of American CEOs are pessimistic about the economy in 2016 according to new surveys from PwC and Business Roundtable.
Those surveys say CEOs aren’t planning to spend much money next year, which will hurt the economy further.
When optimism flees the C-suite, executives spend less on new equipment, buildings, hiring, and research & development, all which drive growth when used liberally.
The Business Roundtable’s forecast for business investment in 2016 is anemic at best, reaching it’s lowest point of optimism since 2009.
“To see that sharp decline in capital investing is alarming,” says Randall Stephenson, CEO of AT&T, and chair of the Business Roundtable. “Investment drives hiring. It drives productivity and wage growth.”
CEOs are not only worried about the economy, but also Congress’ inability to fix corporate tax structures which are some of the highest in the world.
PwC is also seeing growing pessimism among executives. In its survey PwC blames a skittish economy and the devaluation of the Chinese yuan in August which triggered a global stock market sell-off.
Only one-fourth of executives surveyed by PwC are planning “major” new investments now, down from 36% in the prior quarter. Just over 50% of executives said they would be hiring, also a decrease from early 2015.
On a positive note, PwC says executives are not worried about another “Great Recession” at this time.