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In US and Across the Globe, Record Numbers of CEOs Are Optimistic About Economy

by The Daily Signal | 3.27.18

Kyle Perisic / January 26, 2018

A record number of CEOs are optimistic about the the U.S. and global economies, thanks in part to the tax cuts President Donald Trump signed into law Dec. 22, according to consulting firm PwC’s new annual survey.

The Tax Cuts and Jobs Act lowered the U.S. corporate tax rate to 21 percent from 35 percent. Following recent trends of increased investment in employees and customers after the tax cuts, companies such as Walmart have been investing in its workers, while utilities such as Potomac Electric Power Co. are passing on the savings to customers by lowering their energy bills.

Trump remarked on Twitter how the response to the “big and very popular” tax cuts and tax reform law is a “phenomenon that nobody even thought of, and now it is the rage.”

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Of the nearly 1,300 CEOs surveyed by PwC worldwide, 57 percent said they think the economy will improve over the next 12 months. That’s nearly double last year’s 29 percent. When the question was first asked in 2012, the number was just 15 percent.

This year set an all-time high for CEO optimism in the survey and for the first time, it was over 50 percent. It’s also the largest one-year leap in the survey’s history.

In 2012, 48 percent of CEOs thought the economy was in decline, compared with just 5 percent this year.

CEOs in North America, Latin America, Western Europe, the Asia-Pacific region, Central and Eastern Europe, the Middle East, and Africa were all more optimistic this year, by anywhere from 38 percent more (in Africa) to 139 percent more (in North America).

Sixty-three percent of North American CEOs are optimistic about the economy this year, up from just 26 percent last year.

PwC, also known as PricewaterhouseCoopers, singled out the U.S. CEOs, saying it’s “little wonder that North America is so positive,” given the Trump administration’s “pro-business agenda” of tax cuts and deregulation.

“The Trump administration’s pro-business agenda of deep corporate tax cuts and rolled-back regulation has helped accelerate one of the longest stock market booms in history, while driving corporate confidence to new highs and jobless rates to new lows,” says the PwC report, “The Anxious Optimist in the Corner Office.”

While the leap in optimism for the economy does not necessarily translate into confidence for CEOs’ own companies over the next 12 months, 42 percent of CEOs said they are “very confident” in their company’s growth prospects in the next 12 months, up from last year’s 38 percent.

The survey also found the U.S. “remains the top spot for global investment,” with 46 percent citing the U.S. when asked which three countries (excluding the country in which the CEOs themselves are based) they consider most important for their organization’s overall growth prospects over the next 12 months. China was second at 33 percent, and Germany was third at 20 percent.

The Daily Signal

Written by The Daily Signal

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