Business Roundtable Releases Third Quarter 2008 CEO Economic Outlook Survey

CEOs expecting modest growth, increased capital expenditures despite strong cross currents

Washington, D.C. – The Business Roundtable CEO Economic Outlook Index — which reflects expected sales, capital expenditures and employment figures for the next six months — increased slightly to 78.8 in the third quarter of 2008, up from 74.5 in the second quarter, according to results released today.

According to the survey, the capital expenditure outlooks of CEOs of leading U.S. companies have risen noticeably since last quarter, while their expectations for sales and employment remain roughly unchanged.

"Our member CEOs’ increased expectations for capital spending suggest that investment plans are likely to remain on track for the second half of 2008, despite the lingering housing recession and continued concerns about the nation’s financial sector,‖ said Harold McGraw III, chairman of Business Roundtable and chairman, president and CEO of The McGraw-Hill Companies." Despite surprisingly strong GDP growth in the second quarter and continued strong exports, our CEOs realize there are still challenges for the economy going forward.

Business Roundtable is an association of chief executive officers of leading corporations, representing a combined workforce of nearly 10 million employees and $4.5 trillion in annual revenues.

The survey’s key findings for the next six months include:

CEO Economic Outlook Index for Third Quarter

On overall U.S. economic growth, member CEOs estimate that GDP growth for 2008 will be 1.4 percent, up from the 1.3 percent GDP growth assumed last quarter.

Exports continue to benefit the U.S. economy and many of the companies participating in the survey. In the second quarter of 2008, exports increased at a 13.2 percent annual pace, about twice the average growth in the 2005 – 2007 period.

"It is important to remember that roughly half of Business Roundtable companies’ revenue comes from outside the United States,‖ added McGraw. ―As a result, our CEOs’ expectations are influenced by both domestic and international conditions. For this reason, our member CEOs remain focused on such issues as healthcare, education, energy and free trade that are so critical to maintaining America’s competitiveness in the international economy."

The Business Roundtable CEO Economic Outlook Survey is a composite diffusion index, which combines responses on projected sales, capital spending and employment to show how member CEOs believe the U.S. economy will perform in the six months ahead. While there has not been a formal U.S. recession since the survey was launched in late 2002, we believe that an index reading of 50 or lower would be consistent with an overall economic contraction and that a reading of 50 or higher would be consistent with expansion.

Business Roundtable’s CEO Economic Outlook Survey, conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economic assumptions and outlooks of Business Roundtable member CEOs. The survey was completed between August 11th and August 28th by Business Roundtable member CEOs. The percentages in some categories may not equal 100 due to rounding.