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Wednesday, September 20, 2006

Survey: CEOs Expect Slower Economic Growth

By Yaser Anwar, CSC of Equity Investment Ideas

US CEOs expect slower economic growth over the next six months, according to a quarterly survey released by the Business Roundtable Monday. The group surveyed 109 of its 160 member companies.

The group's CEO Economic Outlook Index dropped sharply to 82.4 in September from the second-quarter reading of 98.6, to its lowest level in three years.

The survey pool includes Roundtable members: CEOs from large US companies. A number higher than 50 indicates economic expansion.

Of the CEOs surveyed, 23% said they had to absorb almost all of the effect of higher energy costs, which can take a toll on profit margins.

Among other questions, 74% said they expected their company's sales to rise in the next six months, 50 percent said they expected their company's capital spending to remain unchanged, and 29 percent said they expected their company's employment to decline.

In the 3rdQ of 03, as the U.S. economy accelerated out of a downturn, the Economic Outlook Index stood at 67.7, according to a Business Roundtable.

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