Dive Brief:

• U.S. business economists worry less about the prospect of recession than at the start of last quarter and 56% anticipate that sales will rise in the next three months, the National Association for Business Economics said Monday, describing survey results.
• “Sales expectations have strengthened to their highest level since mid-2024, while capital spending expectations remain elevated,” E-Y Parthenon Chief Economist and NABE President Gregory Daco said Monday in a statement. The proportion of respondents reporting higher capital spending on artificial intelligence and other improvement rose to 33%, a 2 percentage point increase compared with a survey in October, the NABE said.
• Nearly three out of five respondents (73%) believe AI will boost their company’s productivity this year, the NABE said. Thirty-five percent of companies have adopted AI for moderate use in certain functions or teams, 15% report widespread use and 48% deploy AI in pilot projects, proof of concept experiments or other limited uses.

Dive Insight:

A quarterly survey of 1,200 CEOs across 21 countries by EY-Parthenon tracked the NABE’s findings, with 58% of the top executives expecting AI to significantly fuel growth during the coming two years.

Nearly one out of three CEOs (32%) believe AI will fundamentally reshape operations as they weave the technology throughout their companies, EY-Parthenon said.

“Despite the hype around outsized AI gains, the reality for CEOs is much more complex,” EY-Parthenon Global Vice Chair Andrea Guerzoni said in a statement, noting that “only a standout 20% are capturing breakthrough returns.”

Sixty-nine percent of CEOs believe that they will sustain current hiring levels or hire new talent as they invest in AI during the coming year, EY-Parthenon said. The share of top executives who believe AI will prompt staff cuts fell to 24% in December from 46% in January 2025.

Thirty-one percent of respondents to the NABE survey said they expect to either expand or freeze hiring as they roll out AI, and 44% are unsure of how AI will alter their payrolls this year.

Meanwhile, 73% of NABE panelists anticipate that AI will boost productivity this year, with 13% expecting a significant boost. One quarter of respondents expect limited or no impact.

The 33% share of respondents reporting an increase in capital spending on AI and other areas is the highest proportion since the July 2024 survey and exceeds the 26% average for last year, the NABE said.

“Cost reductions and greater efficiency are cited as the top impact that firms expect from AI,” Martha Moore, NABE Business Conditions Survey chair, said Monday in a statement. Moore is the chief economist and managing director at the American Chemistry Council.