More than 60% of the CEOs of leading U.S. corporations report that Hurricane Katrina will have a negative impact on their businesses, with many expecting the fallout to last up to a year, according to a post-Katrina quarterly survey of 97 CEOs that was released last week by the Business Roundtable.
"While the economy, as reflected in our survey results, clearly took a hit, it does not appear to be uniformly negative," said Hank McKinnell, CEO of Pfizer Inc. and chairman of the Business Roundtable. "Decreased capital spending is a cause for concern because these investments have been a significant driver of long-term economic growth. It is a number we will be watching in the next survey."
The survey showed that only 40% of CEOs planned increases in capital spending post-Katrina compared to 54% in the third-quarter survey, which was conducted in mid-August prior to Katrina striking the coasts of Louisiana, Mississippi and Alabama. Sales expectations declined slightly from the pre-Katrina survey, with the percentage of CEOs who had anticipated higher sales over the next six months dropping nine percentage points to 74%. Employment expectations were affected the least with only a two percentage point drop in the number of CEOs planning on hiring.
When asked to identify the primary source of any negative impact on their businesses, 29% of the CEOs cited higher energy prices, while 27% pointed to damage to infrastructure and facilities along the Gulf Coast region, and 19% cited supply disruptions.
The Washington, DC-based Business Roundtable is an association of chief executive officers of major corporations with a combined workforce of more than 10 million employees and $4 trillion in annual revenues.
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