CAT Caterpillar Inc

Chief executives see the U.S. economy stuck in slow-growth mode and appear to have little optimism that November's election will spark stronger gains.

The Business Roundtable's quarterly survey of CEOs, released Monday, shows the economic outlook among leaders of America's largest businesses is little changed from a year ago. The election is one reason businesses are reluctant to increase capital investment or hire at a stronger pace, said Doug Oberhelman, CEO of Caterpillar Inc. and the group's chairman.

"At this time of every election cycle, especially after a two-term president, there is a degree of uncertainty," he said.

Regardless of whether Democratic nominee Hillary Clinton or her Republican rival Donald Trump wins, Mr. Oberhelman said, the business advocacy group's agenda for 2017 won't change: expanding free-trade agreements, lowering business taxes and reducing regulation.

But neither candidate support the Trans-Pacific Partnership trade deal, a top priority for the group. Roundtable president John Engler said the group is pushing for Congress to vote on it before President Barack Obama leaves office.

"Public support for TPP has come up," Mr. Engler said. That's "remarkable given the unprecedented opposition from the two major presidential candidates."

CEOs see the economy gathering little momentum in the second half, according to the group's third-quarter survey.

The business leaders expect a slight deceleration in hiring, with 27% saying their firms plan to add to U.S. payrolls in the next six months, compared with 29% in the second-quarter survey. The share planning to reduce employment increased by a percentage point, to 36%.

CEOs' outlook on business investment was virtually unchanged from the second quarter, with 38% expecting to increase business spending in the next six months. The sales outlook was slightly weaker, but still a majority expect increased sales in the next two quarters.

"This reflects the unfortunate new normal," Mr. Oberhelman said. "The U.S. economy is pretty much stuck in neutral."

The executives expect the economy to grow 2.2% for all of 2016, up from a 2.1% annual gain forecast in the prior survey. Given that the economy has grown at near a 1% annual rate through the first half of the year, that would amount to a modest acceleration in the second half. But 2.2% growth is just in line with the average gain during the seven-year-old expansion.

The third-quarter survey was conducted between Aug. 3 and Aug. 24. Responses were received from 144 CEOs.

Write to Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

September 12, 2016 20:35 ET (00:35 GMT)

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