Chief executives of several dozen top U.S. based corporations Wednesday evening released an economic forecast that is more conservative than either the Bush administration or most private sector economists.
In a compilation of several individual forecasts, the top CEO's see U.S. growth in the range of about three percent over the next year. They expect the recovering economy to add jobs but not many. Jeffrey Immelt of General Electric blames slow employment growth on excess capacity that was built during the boom years of the late 1990s. He says current utilization of existing plants and equipment is only 74 percent, its lowest level in nearly 30 years.
The CEO's characterize the economy as good but not super. They're not worried about increases in either interest rates or inflation but they are concerned about the rapid rise in the government's budget deficit.
Franklin Raines, the chairman of Fannie Mae the largest company involved in housing finance, says the Business Council forecast is deliberately cautious. "I think the estimate of from three to four per cent growth is about right. But I think the CEO's who are doing this are speaking from their own experience," says Mr. Raines. "And remember that many are not involved in the service economy where much of the growth has been happening. So we may be a little over weighted towards the goods producing sector among our CEO's."
Well over 50 corporate leaders are assembled at this mountain resort for their semi-annual meeting on global issues. They will be discussing in detail the troublesome problems of corporate governance and what is perceived as their own exceedingly generous level of financial compensation.