Even as JPMorgan Chase & Co plans a new headquarters on Park Avenue, some big banks and money managers are shifting resources by hundreds or thousands of miles to cheaper US cities.
CHIEF executives of America’s largest companies raised their outlook for spending, hiring and sales to the highest level in 15 years in the first quarter after the passage of the U.S. tax overhaul.
While the Business Roundtable CEO Economic Outlook Index reached its highest level in the survey’s history, the group’s leaders warned that recent U.S. trade policy could imperil the gains. The index is a composite of companies’ plans for capital spending and hiring, as well as projections for sales, over the next six months.
Small-business owners, in a separate report Tuesday, reported their highest optimism in 35 years in February.
The Business Roundtable survey is the first the group has conducted since the U.S. tax changes were adopted in December. The law included many provisions the Business Roundtable supported, such as a much lower corporate tax rate and lighter taxes on many U.S. companies’ foreign earnings.
James Dimon, chairman of the Business Roundtable and CEO of JPMorgan Chase & Co., said the survey results are likely to translate into more jobs for Americans.
“The historic tax-reform law is already prompting more investment, jobs, high wages and more benefits for workers all here in the United States of America,” Mr. Dimon said.
Executives also boosted their projection for growth this year in gross domestic product, predicting a 2.8% rate, above their earlier estimate of 2.5%.
The survey of 137 chief executives at large U.S. businesses was conducted between Feb. 7 and 26.
Joshua Bolten, Business Roundtable president and CEO, said the survey was conducted before the Trump administration’s announcement of tariffs on imports of steel and aluminum, which conflict with the Business Roundtable’s position in favor of negotiations that would lower tariffs around the world. Mr. Bolten served as budget director and chief of staff in the administration of President George W. Bush.
“Missteps on important elements of U.S. trade policy will undermine great economic progress that’s been realized so far from tax reform and regulatory relief, perhaps even reverse it,” Mr. Bolten said.
In the first quarter, the share of firms planning to increase staff over the next six months rose to 61%, above the 43% of the fourth quarter, while the share of companies planning to ramp up capital investment increased to 68% from 49%. The share expecting sales to increase shot up to 93% this quarter from 76%.
Small-business owners also responded positively to the tax changes, showing the most optimism in more than three decades, according to another report.
The Small Business Optimism Index rose in February to 107.6, the National Federation of Independent Business said. It was the second-highest level in the measure’s 45 years, second only to a reading of 180 in 1983.
“Small-business owners are telling us loud and clear that they’re optimistic, ready to hire and prepared to raise wages,” NFIB chief economist Bill Dunkelberg said. - WSJ
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