CEOs see US business impact from coronavirus lingering until end 2021

Business | 29 Jun 2020 11:09 pm

The chief executives of the nation’s biggest companies expect the business impact from the coronavirus to linger until at least the end of 2021. Nearly a third of them fear it could persist beyond then.

In a second-quarter report from the Business Roundtable released Monday, the corporate trade group said that a survey of its members − which include General MotorsApple and Johnson & Johnson, among other major companies – showed that a majority expect most expect business conditions to recover by the end of 2021.

But significant doubt remains: 27% expect the recovery to stretch beyond next year.

That sizable percentage − and disagreement among the country’s most powerful executives − represents how uncertain the economic climate remains as the U.S. battles a health disaster with little modern precedence. 

There had been hopes that the U.S. was on its way to recovery after fears and lockdown orders jolted the economy this spring. But cases of the coronavirus are back on the rise, and states like Texas have had to delay their reopening plans. On Friday alone, 45,255 additional cases were reported, bringing the country’s seven-day average to more than 41% higher than the prior week.

The Business Roundtable report referred to the growing infection rate, saying the new cases “suggest the need for broader adoption of safety measures and for public officials to examine their reopening plans to ensure widespread use of masks, continued limitations on gathering size, and measures to keep vulnerable populations safe.”

In some cases, CEOs have acted before local governments, with companies such as Apple closing stores in hot-spot states before being mandated to do so. 

“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 Walmart CEO and Business Roundtable Chairman Doug McMillon. “We urge lawmakers at the federal, state and local levels to coordinate as much as possible to control further spread of this virus.”

The Business Roundtable’s CEO Economic Outlook Survey − a composite index of chief executive plans for capital spending and hiring over the next six months − fell to 34.3, its lowest reading since the second quarter of 2009, as the U.S. was struggling to recover from the global financial meltdown of the previous year. The record low, which the index hit during the first quarter of 2009, is negative 5. 

The second quarter survey was conducted between June 1 and 22.

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