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Top CEOs say business fallout from coronavirus will extend through 2021

Business Roundtable’s economic outlook survey fell to its lowest rating since 2009

Walmart CEO Doug McMillon, chairman of Business Roundtable, said the “health and safety of our employees, customers and communities we serve” are top priorities. (Mark Lennihan/AP)
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The chief executives of some of the nation’s largest companies expect the ill economic effects of the coronavirus pandemic to extend through 2021, and nearly a third of them say the harm will last even longer.

Business Roundtable surveyed 136 members about their projected sales, capital spending and hiring for the next six months. The CEO Economic Outlook Survey fell to 34.3 in the second quarter, the lowest reading for the composite index since the same three months of 2009, according to a report released Monday. But it’s well above the all-time low of -5.0, set during the first quarter of 2009 at the height of the Great Recession.

The group’s members include the CEOs of Apple, JPMorgan Chase and Chevron, among others. The poll, taken from June 1 to June 22, reflected the economic fallout of the novel coronavirus, which ushered the United States into recession as businesses and factories were forced to shut down or curtail operations to stem its spread. More than 47.3 million Americans have filed jobless claims since March.

Consumer spending rebounds a record 8.2 percent in May even as incomes slide

“The outlook of Business Roundtable CEOs reflects the reality of current economic conditions,” Joshua Bolten, president and chief executive of Business Roundtable, said in the report. Though appreciative of the steps taken by the White House and Congress to help American workers, small businesses and communities, the CEOs feel that “there is much more to do,” he said.

Public health concerns continue to weigh on the economy as coronavirus infections surged last week in several states, promoting some to roll back their reopening timelines. On Friday, Texas and Florida ordered bars to close and imposed new restrictions in an attempt to contain the spike. More than 124,000 Americans have died of covid-19. The 2.5 million confirmed cases represent a severe undercount, the head of the U.S. Centers for Disease Control and Prevention said last week, estimating that more than 24 million Americans have been infected.

When asked when business conditions would return to pre-pandemic levels, most of the CEOs said the end of 2021. However, 27 percent had a longer horizon and said their companies would not fully recover until after 2021.

The chief executives’ plans for:

  • Hiring plunged nearly 40 points, to 26.3. By comparison, the subindex’s historical average is 58.9.
  • Capital investment dropped more than 37 points, to 25.0. The historical average is 76.3.
  • Sales expectations slid more than 38 points, to 51.5. That compares with a historical average of 112.1.

“Our battle against COVID-19 is far from over, and our top priority remains the health and safety of our employees, customers and communities we serve,” said Doug McMillon, Walmart’s chief executive and the chairman of Business Roundtable.

The survey found all chief executives had adopted or plan to adopt social distancing measures at their work sites. Nearly all executives said they have adopted routine cleaning and disinfecting and are encouraging employees to wear masks and stay home if they’re sick. More than two-thirds of executives said they have expanded wellness and health services for their employees, and 95 percent have expanded flexible work arrangements, such as teleworking.