Dive Brief:

• CEO sentiment brightened this month on an increase in plans for capital investment and expectations for slightly higher sales during the next six months, the Business Roundtable said.
• A survey-based index of the CEO outlook edged up to 76, the Business Roundtable said Thursday. Yet the index is well below its historic average of 83, and CEO hiring plans this quarter were largely unchanged from Q2. The employment plans are “consistent with a softening labor market,” the organization said, referring to its survey of 157 CEOs.
• “Though we are pleased to see some recovery in CEO plans for capex, there’s fragmentation among the various sectors, with trade-exposed industries like manufacturing facing headwinds,” Business Roundtable CEO Joshua Bolten said in a statement.

Dive Insight:

The Business Roundtable findings align with gains in CEO sentiment this quarter as highlighted by a EY-Parthenon global survey.

More than half of CEOs (52%) plan to boost capital investment, EY-Parthenon said Thursday, while 57% expect geopolitical and economic uncertainty to persist beyond a year but express growing confidence in their ability to navigate volatility.

Nearly half of chief executives (48%) plan to pursue mergers and acquisitions this year, and 73% expressed interest in joint ventures and strategic alliances, according to EY-Parthenon, which surveyed 1,200 CEOs in 21 countries last month.

Nearly three out of four global CEOs (72%) aim to advance plans to bring operations closer to home, EY-Parthenon said, as President Donald Trump shakes up trade policy and sets the highest U.S. tariffs since the 1930s.

The survey findings “highlight a clear shift toward localization and regionalization, as leaders seek to enhance resilience and agility in their operations,” EY Global Vice Chair Andrea Guerzoni said in a statement.

Bolten expressed concern on behalf of U.S. CEOs about import taxes and other obstacles to open trade.

“The president has secured some significant concessions in trade negotiations, and we urge our trading partners and the administration to continue working together to remove harmful tariffs and non-tariff barriers,” he said.

The Business Roundtable index on employment intentions rose 2 points to 37 but remained well below the historic average of 61 and the level associated with expansion, the organization said.

Monthly gains in U.S. payrolls have slowed to just 29,000 on average during the past three months, Federal Reserve Chair Jerome Powell said on Wednesday. Also, unemployment rose in August to 4.3% from 4.2% in July.

Powell flagged the softening labor market after policymakers trimmed the federal funds rate by a quarter point to a range between 4% and 4.25%. Citing job market weakness, they forecast two more quarter-point cuts this year.

On a brighter note, 71% of U.S. CEOs expect sales revenue to rise during the next six months compared with 67% during the Q2 survey, the Business Roundtable said.