CEO survey reveals deep gloom

America's CEOs are in a deep funk.

Their economic outlook for sales, employment, and capital spending in the next six months plunged to a record low, the Business Roundtable reported Tuesday. The group's survey index fell to -5 from 16.5 in the first quarter of this year, the index's first foray into negative territory in its six-year history and far below the 50-plus reading that would signal expansion.

Still optimistic?

"I think we're really close to a bottom," Harold "Terry" McGraw III, chairman of the Business Roundtable and chairman and CEO of The McGraw-Hill Companies, told reporters in a conference call. "We'll start to see the pace of decline slowing down."

The outlook of the 100 CEOs surveyed by the business organization didn't reflect his optimism. The survey found that 71 percent expected their company's employment level to drop in the next six months, up from 60 percent in the fourth quarter of 2008; 67 percent expected lower sales vs. 45 percent the previous quarter; and 66 percent predicted a drop in capital spending, up from 52 percent.

Markets more buoyant

The survey was taken last month during the run-up in the stock market, which has fueled hopes for recovery. But the CEOs – normally, an optimistic bunch – sound worried, which is not a good sign.