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Transcript: Q3 2012 Business Roundtable CEO Economic Outlook Survey Call

Transcript: Q3 2012 Business Roundtable CEO Economic Outlook Survey Call

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Published by: Business Roundtable on Sep 27, 2012
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11/29/2012

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BUSINESS ROUNDTABLEModerator: Jim McNerney09-26-12/10:00 am CTPage 1
BUSINESS ROUNDTABLEModerator: Jim McNerneySeptember 26, 201210:00 am CT
Coordinator:
Ladies and gentlemen, thank you for joining Business Roundtable’s briefing
on its Third Quarter 2012 CEO Economic Outlook Survey.The members of Business Roundtable are chief executive officers of the
nation’s leading companies.
Collectively, they represent more than 16 millionemployees over $7.3 trillion in annual revenues and generate nearly $500billion in sales for small and medium-sized businesses annually.The results of Business Roundtable Third Quarter 2012 CEO EconomicOutlook Surveys reflect expected business conditions from its member
companies’ prospectus for the next six months.
Conducted quarterly sincefourth quarter 2002, Business Roundtable CEO Economic Outlook Survey isthe leading CEO-based survey of sales, capital funding and employmentprojected over the next six months.
This quarter’s survey was completed between August 30th and September 
14th. One hundred and thirty-eight CEOs completed the survey. You can findan interactive chart illustrating these results from previous quarters and
 
BUSINESS ROUNDTABLEModerator: Jim McNerney09-26-12/10:00 am CTPage 2
comparisons with key economic metrics such as GDP and employment atwww.brt.org/ceo_survey.Before I turn the call over to our host, please note that all telephoneparticipants are in a listen-only mode at this time. Later, we will conduct thequestion-and-answer session where you will be given the opportunity to ask questions about the CEO Economic Outlook Survey.If you should require assistance during the call, please press star 0.
Today’s conference is being recorded.
If you have any objections, you maydisconnect at this time.With that, I will now turn things over to our host, Mr. Jim McNerney,Chairman, President and CEO of the Boeing Company and the Chairman of Business Roundtable. Also joining Mr. McNerney is John Engler, President of Business Roundtable.Mr. McNerney?Jim McNerney: Thank you and hello. And thank you all for joining us for the release of 
Business Roundtable’s Third Quarte
r 2012 CEO Economic Outlook Survey.This quarter
’s survey shows a downturn from last quarter in CEO expectations
for sales, capital expenditures and employment over the next six months.Expectations for overall 2012 GDP growth weakened from a previouses
timate of 2.1% to this quarter’s estimate of 1.9%.
 These results reflect global demand flattening out, particularly in Europe andChina, but also a number of domestic policy issues that could have a near-
 
BUSINESS ROUNDTABLEModerator: Jim McNerney09-26-12/10:00 am CTPage 3
term negative impact on the economy and the business climate, includingautomatic tax increases across the board, spending cuts and the failure to raise
the debt ceiling, so called “fiscal cliff,” and the uncertainty attendant to it
 certainly is cold water on long-term planning. Until a path to a resolution of these issues is identified, business confidence will likely remain underpressure.Taking a closer look at the data and what our members are projecting over thenext six months, we found that on sales, 58% of member CEOs anticipatesales will increase in the next six months, down 17% from that sameexpectation last quarter; 27% expect sales remain the same, up from 20% thelast quarter; and 15% of our CEOs expect sales to decline, a 6% increase fromlast quarter.On capital spending, 30% of member CEOs project higher spending in thenext six months, which is down significantly from the 43% last quarter; 51%expect spending to remain the same, up from 45% last quarter; and 19%
 project a decline, up from last quarter’s 12%.
 On employment, 29% of member CEOs expect to add US employees, whichis down 7 points from 36% last quarter; 37% expect deployment to remainsteady, which is down 7 points from 44% last quarter; and 34% project loweremployment, up from 20% in the second quarter of 2012.Each quarter, as most of you recall, we combine the three categories -- sales,capital spending and employment -- into an index to provide a quick snapshotof anticipated economic conditions for the next six months. As I mentioned,
this quarter’s CEO Economic Out
look Survey Index reflects a prettysignificant downturn in expectations, falling from 89.1 in the second quarterof 2012 to 66 for the third quarter of 2012.

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