The consistently sluggish expansion of the nation’s GDP, which slowed in the second quarter to an annual rate of only 1.2%, can be largely blamed on consistently disappointing levels of business spending on new factories, equipment and software, which has subtracted from growth for three straight quarters. While consumer spending rose at 4.2% in the second quarter, business investment actually fell at a 2.2% pace.
Many CEOs will blame their unwillingness to make new business investment on an Obama administration they say is hostile to corporate America, as demonstrated by its attitude on taxes and the ever-growing spate of business regulations.
However, uncertainty over the most contentious presidential election in decades also unnerves CEOs who want predictability above all else as they make investment decisions. But business leaders’ trepidations go far beyond the election result, some observers insist.
Moreover, tepid business investment is, in large part, being blamed for the longest slide in American worker productivity since the late 1970s, a development that is plaguing prospects for long-term growth. Investment in new plants and machine tools, new computer systems and other technologies could help boost worker efficiency, but hasn’t been available.
Meanwhile, another important input to the production process—labor—is becoming increasingly scarce and more expensive, as Bloomberg noted.
Other factors are at work, too, including slack global demand, as even the anemic U.S. economy has become the most consistently reliable engine of economic growth anywhere in the world. Slowing in China, stasis in Europe, and troubles in Brazil all cut into foreign demand for American goods and services.
“The logic is quite simple: the corporate sector is unlikely to increase investment in the absence of strong (global) final demand,” Deutsche Bank analyst Dominic Konstam wrote recently.
Whatever its exact elements, this toxic brew of factors has been a recipe for disaster for U.S. business investment. It’ll be up to CEOs to decide whether to change it.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
