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Harris Poll: Execs Don't See The Party Ending


News: Analysis & Commentary: BUSINESS WEEK/HARRIS EXECUTIVE POLL

HARRIS POLL: EXECS DON'T SEE THE PARTY ENDING

The economic tea leaves aren't too conclusive of late. The Purchasing Managers' index for May rose to its highest level since late 1994. Yet April's consumer spending was up just 0.1%, and the Conference Board's index of leading indicators actually declined.

How does all this leave executives? Still feeling sanguine, according to a semi-annual BUSINESS WEEK/Harris Executive Poll of expectations for the next 12 months. Execs' view of their companies' prospects actually has improved since December, and they are looking to hire more workers. The sole cloud: interest rates, which most now think will move up.

This is an extended, online-only version of the poll that appears in the June 16, 1997, issue of Business Week.

THE BIG PICTURE

How would you characterize your outlook for the U.S. economy?

MAY 1997 DEC. 1996 MAY 1997 DEC. 1996

Very optimistic 19% 13% Somewhat

Somewhat pessimistic 3% 7%

optimistic 77% 80% Very pessimistic 1% 0%

TAKING BETS ON GROWTH

Compared with the past 12 months, do you think the rate of growth of the gross domestic product will go up, go down, or stay the same?

MAY 1997 DEC. 1996 MAY 1997 DEC. 1996

Go up 27% 27% Stay the

Go down 21% 18% same 52% 55%

PRICE HIKES?

Compared with the past 12 months, do you think the rate of inflation will go up, go down, or stay the same?

MAY 1997 DEC. 1996 MAY 1997 DEC. 1996

Go up 37% 31% Stay the same 58% 63%

Go down 5% 5% Don't know 0% 1%

TRACKING TREASURIES

Compared with where it is right now, do you think the 30-year Treasury bond rate will go up, go down, or stay the same?

MAY 1997 DEC. 1996 MAY 1997 DEC. 1996

Go up 52% 38% Stay the same 31% 39%

Go down 14% 17% Don't know 3% 6%

THE JOBLESS ISSUE

Compared with the past 12 months, do you think the unemployment rate will go up, go down, or stay the same?

MAY 1997 DEC. 1996 MAY 1997 DEC. 1996

Go up 23% 28% Stay the same 57% 53%

Go down 20% 19%

COMPANY REPORT CARD

And now some questions about your company. Do you think each of the following will increase or decrease?

INCREASE DECREASE STAY DON'T AVERAGE EXPECTED

SAME KNOW INCREASE

Sales

MAY 1997 93% 2% 4% 1% 9.8%

DEC. 1996 92% 1% 6% 1%

Full-time employees

MAY 1997 55% 21% 23% 1% 1.8%

DEC. 1996 48% 18% 34% 0%

Investment in plant and equipment

MAY 1997 64% 12% 22% 2% 4.4%

DEC. 1996 65% 11% 21% 3%

Typical prices of standard products or services

MAY 1997 57% 14% 27% 2% 1.9%

DEC. 1996 37% 20% 41% 2%

Exports

MAY 1997 55% 8% 11% 26% 6.0%

DEC. 1996 40% 4% 19% 37%

INCREASE DECREASE STAY DON'T AVERAGE EXPECTED

SAME KNOW INCREASE

Wage and salary rates

MAY 1997 89% 1% 10% 0% 4.0%

DEC. 1996 84% 1% 15% 0%

Health-care costs per employee

MAY 1997 64% 11% 21% 4% 3.3%

DEC. 1996 55% 15% 29% 1%

Investment in Research & Development

MAY 1997 53% 12% 26% 9% 4.8%

DEC 1996 51% 7% 34% 8%

RATING THE FEDERAL RESERVE

How would you rate the job Alan Greenspan and the Federal Reserve are doing -- excellent, pretty good, only fair, or poor?

MAY 1997 DEC. 1996 MAY 1997 DEC. 1996

Excellent 39% 50% Poor 1% 0%

Pretty Good 53% 44% Don't know 0% 2%

Only Fair 7% 4%

JUDGING THE PRESIDENT

How do you rate President Clinton's handling of the economy --excellent, pretty good, only fair, or poor?

MAY 1997 DEC.1996 MAY 1997 DEC.1996

Excellent 4% 5% Poor 9% 10%

Pretty good 43% 40% Don't know 1% 4%

Only fair 43% 41%

LONG-TERM GROWTH

Some experts believe that, because of higher productivity, the economy now can sustain a higher rate of growth and lower unemployment without causing inflation. Do you agree, or disagree?

Strongly agree 16%

Somewhat agree 69%

Somewhat disagree 13%

Strongly disagree 2%

BUDGET MATTERS

White House and congressional negotiators have reached a settlement that would balance the federal budget in 2002. Do you agree or disagree that:

AGREE DISAGREE DON'T

KNOW

The balanced budget will produce

long-term gains for the economy 75% 22% 3%

Negotiators have only delayed

spending that will send the budget

out of balance after 2002 59% 33% 8%

Balancing the budget at this point will

have little effect on the economy 41% 57% 2%

The deal ultimately won't balance

the budget by 2002 75% 21% 4%

CAPITAL-GAINS EFFECT

As a result of budget negotiations, the capital-gains tax could drop from 28% to 20%. What effect do you think such a cut would have on investment?

Spur significant new investment throughout the economy 39%

Encourage only modest investments in certain industries 42%

Have little effect on investment, producing only a tax

savings for individual investors. 18%

Don't know 1%

Survey of 403 senior executives at large public companies. Interviews were conducted May 19-30 for BUSINESS WEEK by Louis Harris & Associates Inc. EDITED BY KEITH H. HAMMONDS


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