Tax Policy, Regulatory Issues Hold Back Investment - Modern Distribution Management

Tax Policy, Regulatory Issues Hold Back Investment

Regulatory costs biggest cost concern for CEOs in fourth quarter Business Roundtable index.
jenel-white

U.S. tax policy and regulatory issues continue to hold back investment plans for many CEOs, according to the Business Roundtable fourth quarter 2014 CEO Economic Outlook Index. The index, which provides a picture of the future direction of the U.S. economy based on CEOs’ plans for sales, capital spending and hiring, declined moderately from the third quarter, with capital spending declining the most.

"The economy ended the year essentially where it started – performing below its potential," said Randall Stephenson, chairman of Business Roundtable and CEO of AT&T Inc. "Congress and the Administration should act now on tax extenders and Trade Promotion Authority to encourage additional business investment in the United States to help the economy grow and create more jobs."

CEOs said they expect 2015 gross domestic product growth of 2.4 percent, unchanged from their 2014 expectation. Sales growth expectations declined 1.3 points from last quarter.

CEOs' plans for hiring increased 3.6 points in the fourth quarter survey – a bright spot compared to last quarter's 15.7-point decline. Forty percent of respondents said they expect their companies' U.S. employment levels to increase in the next six months, and 36 percent said they expected no change.

Regulatory and labor costs were the greatest areas of cost pressure for respondents. Health care costs as a top area of cost pressure fell 10 percentage points from the third quarter but remained the third-highest concern for CEOs.

Read more about the Business Roundtable fourth quarter 2014 CEO Economic Outlook Index here.

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