In Their Own Words: How 10 CEOs Feel About the Economy

Economists aren't very good at what they do because they deal mostly with theories and assumptions. Businesses are pretty good at what they do because they deal mostly with customers and competition. If you want to know how the economy is doing, ask the business leaders. They know the reality; they have the scoop.

I recently dug through a pile of conference call transcripts to see what CEOs are saying about the state of the economy. Here are 10 excerpts (all from conference calls that took place in the last 90 days).

Muhtar Kent, CEO, Coca-Cola (NYSE: KO  ) :

I think essentially in Europe there is a sentiment there that people are beginning to feel that it is not going to get any worse, that there will be some expansion happening as we move forward and sort of just purely fiscal restraint and monetary restraint. So that feeling is beginning to emerge but I think it is going to be long recovery ...

For the rest of the world, whether it's Africa, the youngest billion, Latin America, Eurasia, our Middle East, we see and of course, Asia, Southeast Asia and other parts of Asia, Indian subcontinent, we see growth, we see very disciplined, monetary policy, balanced budgets, good banking system and the consumer is more positive, and so it's modeled, and it's mixed here into United States, we see some signs of improvement.

David Cote, CEO, Honeywell (NYSE: HON  ) :

So for now, we're cautiously optimistic, but it's just too early to tell what direction the economy is going ... And we're all concerned that, at some point, this thing turns again and turns in the other direction. We just think the smart thing to do now is to stay conservative and stay prepared. There's -- I see very little downside to being prepared for the downside, and that's the way you're just looking at it. And we're saying, "Okay, better to have this in our pocket to be prepared to deal with that downside." If it doesn't happen, well, there is restructuring opportunity, there is let-it-fall-through opportunity, there may be other investments that we'll do. Right now, just because the news looks a little better the last couple of weeks, but we just don't think this is a good time to declare economic victory.

David Steiner, CEO, Waste Management (NYSE: WM  ) :

Yeah, I don't know about you all, but for about two years from 2010, 2012, when I go overseas particularly to China, it was the only place you'd go where you see cranes on the skyline. Over the last year traveling throughout the United States, I'm starting to see cranes on the skyline again, which I think is a positive sign.

Again, we're not going to call that good times are here again. But I think it's safe to say that we believe what we're seeing is some stability and that we will actually continue to see some modest growth.

Prem Watsa, CEO, Fairfax Financial Holdings:

And the economy, even last quarter, the United States was flat, or down 0.5%. So in spite of QE3, in spite of QE2, QE1, all of that massive stimulus, monitory stimulus, hasn't had much of an impact on the economy. And so we're just thinking that it's a time to be conservative, but we think what happened in the '08, '09, was not like any other economic recession. We mentioned a few times, we think this is a 1 in 50, 1 in a 100-year storm, so you have to be prepared for its after effects. We don't think it just lasted for 3 and 6 months, and so now we can go forward.

Jamie Dimon, CEO, JPMorgan Chase (NYSE: JPM  ) :

I think the American economy -- I said the table is rather well set. Consumers, businesses, housing, small businesses, they're all in pretty good shape. 

Samuel J. B. Pollock, CEO, Brookfield Infrastructure Partners:

Entering 2013, we believe that the global economic recovery is beginning to accelerate. Prospects for the U.S. economy have improved as the housing market has finally turned the corner. Also after a relatively weak year, the Chinese economy is showing signs of strengthening.

Mortimer Zuckerman, CEO, Boston Properties:

I think we are looking at the weakest economic recovery in terms of the growth of -- in real final sales, employment housing and organic personal income, not to mention that every measure of consumer and small business sentiment is locked in recession terrain. I guess it's probably fair to state that I'm having trouble seeing the roots of the recovery. In my estimation, there are not too many tools left in the government toolbox. We've had the most stimulative fiscal and monetary policies in our history, deficit spending of about $1.3 trillion this past year and monetary policies that, by their own statements, have put in $85 billion a month into the money supply and yet, these policies have failed to reignite the economy. And whatever growth there is cannot be sustained without reliance on government steroids. This is an economy on major life support with virtually 0 economic momentum, and we still face the risk of a major bump from some unforeseen quarter.

Donald James, CEO, Vulcan Materials:

When we've gone back and looked at the last 5 or 6 construction cycles in the U.S., you always see very robust recovery. This cycle is different in a couple of ways. It has been both longer and deeper than anything we have seen, going all the way back to the depression. So an argument can be made if the slope and length of the downturn is proportional to the slope and length of the upturn, which you can see in all the last 5 recessions, we could have a very long and very robust recovery. We are seeing it in housing. We are beginning to see it in private non-res. And as you know, the vast majority and cyclicality in the heavy construction materials business is in the private sector, and there remains relative stability throughout the downturns on publicly funded projects, although there is some cyclicality there as well due to tax revenue changes. But I think we are cautiously optimistic that we've got a very good run in front of us. It's harder to say when the big turn occurs than that it will occur, but we're -- we believe there's a tremendous upside.

Scott Anderson, CEO, Patterson Companies:

They will, I would say, probably the most positive thing in the last 90 days, as I've talked to customers across the country, talked to a lot of them last night at a big dinner, is just the growing confidence that the economy is recovering, their practices are stable, their cash flow is increasing.

Jeffrey Mezger, CEO, KB Home (NYSE: KBH  ) :

While there's been a few years in the making, housing is becoming a bright spot for the economy, and the industry is once again positioned to play its historical role of being a job creator and leading the national economy into a full recovery. All of our served markets are experiencing positive recovery trends to varying degrees.

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Read/Post Comments (35) | Recommend This Article (90)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 19, 2013, at 6:29 PM, wheelen15 wrote:

    If you have plenty of money and a solid background,

    you can be" cautiously optimistic" Mort Zuckerman was the only guy that said anything. And Jamie Dimon, what planet is he on? Now we know how the CEO's feel about the economy, go out and find out how the working and former working MAJORITY , feel about it

  • Report this Comment On February 19, 2013, at 6:45 PM, JadedFoolalex wrote:

    The general consensus seems to be positive... Now if only we can get people out of bonds, we equity investors will be laughing all the way to our retirements!

  • Report this Comment On February 19, 2013, at 6:58 PM, dwdallam wrote:

    OMG.

    "Over the last year traveling throughout the United States, I'm starting to see cranes on the skyline again, which I think is a positive sign."--David Steiner, CEO, Waste Management

    Me too. My horoscope was good today too and that's always a positive sign.

    I think the American economy -- I said the table is rather well set.--Jamie Dimon, CEO, JPMorgan Chase

    And of course, that's what he said in 2007 Q4. Putz.

    "I think we are looking at the weakest economic recovery in terms of the growth of -- in real final sales, employment housing and organic personal income, not to mention that every measure of consumer and small business sentiment is locked in recession terrain."--Mortimer Zuckerman, CEO, Boston Properties

    And Mort is probably the most truthful of them all. A standup guy.

    I'm always fascinated at what I call the "Buy now the market is always going up over history" cheap, lazy CEOs non-analysis to try and always stimulate the economy, even when they know it's about as strong as a wet paper-mache bag. This blimp is going down. Indexes are up 15, 16, 25% in the last year! Tell me Jamie--aka, the sky is always bright-- Diamond, How's that sustainable?

  • Report this Comment On February 19, 2013, at 6:58 PM, dwdallam wrote:

    OMG.

    "Over the last year traveling throughout the United States, I'm starting to see cranes on the skyline again, which I think is a positive sign."--David Steiner, CEO, Waste Management

    Me too. My horoscope was good today too and that's always a positive sign.

    I think the American economy -- I said the table is rather well set.--Jamie Dimon, CEO, JPMorgan Chase

    And of course, that's what he said in 2007 Q4. Putz.

    "I think we are looking at the weakest economic recovery in terms of the growth of -- in real final sales, employment housing and organic personal income, not to mention that every measure of consumer and small business sentiment is locked in recession terrain."--Mortimer Zuckerman, CEO, Boston Properties

    And Mort is probably the most truthful of them all. A standup guy.

    I'm always fascinated at what I call the "Buy now the market is always going up over history" cheap, lazy CEOs non-analysis to try and always stimulate the economy, even when they know it's about as strong as a wet paper-mache bag. This blimp is going down. Indexes are up 15, 16, 25% in the last year! Tell me Jamie--aka, the sky is always bright-- Diamond, How's that sustainable?

  • Report this Comment On February 19, 2013, at 7:09 PM, RonSarson wrote:

    Reading all the CEO comments gives an insight into why we had major economic problems. The shallow comments by the JP Morgan CEO probably represent the banking and financial industry comprehension level. Comparing that comment with the much more profound comments by the "producing company" CEOS is very revealing.

  • Report this Comment On February 19, 2013, at 7:40 PM, porchguy wrote:

    Excuse me, but maybe I'm missing something.

    I know this article was mostly of what CEO'S are saying about the recovery in America and around the world, but my question is this.

    How come so many of these MF articles are written by people that don't even have any or own any shares in the companies they write and sometimes praise about?

    I would think that the columnists that write about companies should at least own some of the shares in companies they are telling us that we might look to invest in.

    I would appreciate it if anyone could let me in on what I'm apparently missing.

    Keep Fooling.

  • Report this Comment On February 19, 2013, at 10:03 PM, CCJJohnson wrote:

    PorchGuy,

    I think that the most likely reason for the authors not owning any stock in the companies they cover is to avoid conflicts of interest. It's to maintain their credibility.

  • Report this Comment On February 19, 2013, at 10:27 PM, ExecProducer wrote:

    Just a bunch of cheerleading - these guys probably have to do business with the government so they are echoing the current administration's party line.

    These types of media replies are typically written by the internal PR people.

    All the other commentary by investors an others I read think we are on the edge - and Europe could tip at any time.

    Read about the WalMart sales for the first few weeks in February? The weakest in seven years. That's just the start...

  • Report this Comment On February 19, 2013, at 10:27 PM, Shawnerz wrote:

    What is Donald James smoking?

    Morgan: haven't you pointed out, many times, the dangers of thinking this cycle will be just like the last?

    The events that have lead us to this moment in time, are different than the events that lead us to that moment in time. There is absolutely no way to say, "it happened this way before, so it should happen this way in the future."

    We've got real budget problems that have to be addressed and, by all indications, will be addressed on March 1st. My guess is it will not be the end of the US economy. GDP and GNP will contract. We will rebound. When the contraction wil happen and for how long, is anybody's guess. When and how how the rebound will be is anyone's guess as well.

    I wish I could believe everything is as rosy as these CEO's seem to be saying.

  • Report this Comment On February 20, 2013, at 1:44 AM, porchguy wrote:

    CCJJohnson,

    I can appreciate your answer to my question. It would make a lot of sense, except that some of these articles are written by the MF columnists that list companies that not only do they promote, but that in the "Disclosure Policy" that the MF has at the beginning of the comments they own.

    Thank you for the reply

  • Report this Comment On February 20, 2013, at 7:28 AM, TheAbbevilleKid wrote:

    "...Economists aren't very good at what they do because they deal mostly with theories and assumptions..."

    Right, multi-degreed mathmatician theorists who know nothing because of theories and assumptions?? And you counter that blanket statement with these stuffed shirt talking heads who've done as much to run the economy into the ground, while scrounging for every last tax payer dollar they can squeeze from the U.S. Govt??

    Who writes these articles for you? The staff at your local high school??

  • Report this Comment On February 20, 2013, at 9:18 AM, tjhandcfm wrote:

    Keep this drivel up, and I block the Motley Fool emails. We are a country with a foreign power and royalty running America into the ground. The foreign power is located in Washington DC and the Royalty are our elected officials.

    The court jesters are to ingratiated to the royalty to tell them to get off our backs. NO, I am not in the TEA party. How does a small business owner feel when he or she reads that last year, the Congressional barber shop was subsidized by the subjugated masses to the tune of $408,000.00.

    See the connection? I didn't know leaches had hair.

  • Report this Comment On February 20, 2013, at 9:32 AM, TMFMorgan wrote:

    <<And of course, that's what he said in 2007 Q4. Putz.>>

    Interesting theory. But here's what he actually said in 2007:

    "Rising defaults in some of the riskiest home loans offered by J.P. Morgan Chase & Co. signal a recession may be looming, Jamie Dimon, the bank's chief executive said Tuesday [January, 2007]

    <<Right, multi-degreed mathmatician theorists who know nothing because of theories and assumptions??>>

    Having degrees doesn't make you right. Being right makes you right. And most of them were wrong.

  • Report this Comment On February 20, 2013, at 11:19 AM, RockenD wrote:

    “Economists aren't very good at what they do because they deal mostly with theories and assumptions. Businesses are pretty good at what they do because they deal mostly with customers and competition. If you want to know how the economy is doing, ask the business leaders. They know the reality; they have the scoop.”

    Morgan, there is a reason why 'most' is in the dictionary. You could have written 'Most economists or Most businesses' or you could have left the damnation of economists and the adulation of business leaders out of the intro and let their words speak for themselves.

    Rocken

  • Report this Comment On February 20, 2013, at 11:34 AM, 48ozhalfgallons wrote:

    Yea teem! Go team!

  • Report this Comment On February 20, 2013, at 2:58 PM, bfsteck wrote:

    How much HIRING are these optimistic CEOs doing?

  • Report this Comment On February 21, 2013, at 7:09 PM, DonkeyJunk wrote:

    Comment analysis summary:

    "I agree with the guy who supports my opinion of the economy and everyone else is dumb."

  • Report this Comment On February 21, 2013, at 11:04 PM, lunchinkorea wrote:

    Sounds good. But I'd really like to compare it to what they were saying in 2007-8 before I put any credence into it.

  • Report this Comment On February 22, 2013, at 6:07 AM, DavidWTaylor wrote:

    CEO's stance on the US economy is in a good agreement with this article publiahed back on December 27:

    http://alturl.com/3rshp

  • Report this Comment On February 22, 2013, at 11:26 AM, atarheelfool wrote:

    When have you ever met anyone with a professional financial background who had a good bead on reality?? The majority of the corporate input in this article is a prime example of what happens when the head detaches itself from the body. What's even more absurd is how or why investors and coporate boards put up with such idiocy. It's amazing how much professional altitude affects the vision.

  • Report this Comment On February 22, 2013, at 11:39 AM, thebestkidz wrote:

    Sure, we have businesses saying it looks positive for the most part, but does that mean we actually ignore the economists, because there have been some pretty accurate economists that predicted the 2008 before it occurred. The problem with listening to only businesses is that they don't see the whole picture nor dive into real details and only live with reality. The fact is, they use trends and financial analysis to predict sales, and sometimes, they are way off, and that's where listening to an economist helps fill in the gaps where they thought they were right but didn't have the input to actually be confident.

  • Report this Comment On February 22, 2013, at 12:24 PM, OFFlyingDutch wrote:

    Positive overall. The cranes on the skyline comment was funny, unless you work for Waste Management in which case I'd be worried.

    My view: this economy wants to take off and hopefully the politicians won't screw it up.

    No more fiscal cliffs and sequestration!

  • Report this Comment On February 22, 2013, at 12:28 PM, mihalikm wrote:

    Just out of curiosity, I cross-referenced each of these CEO's and their companies with campaign donations in opensecrets.org.

    Not surprisingly, those with the most negative comments are the ones who primarily gave to the republican candidates and those with more positive comments gave to the democratic candidates.

    And, interestingly, those with the more positive comments appear to have companies that have best weathered this recession, thereby, better corporate management. Those with more pessimistic comments - well, I say, they should probably look at themselves since they missed all the clues leading up to the economic collapse and were not prepared to deal with their actions.

    Just sayin...

  • Report this Comment On February 22, 2013, at 1:21 PM, usfarbuo wrote:

    what do i care about what these ceos think? they have absolutely no idea what the work force is goiing thru. they are making millions and millions with their bonuses, stock options, and salary. if they all quit work right now they would have enough to live on till the year 2050.

    this sets my bood on a boiling point because they go out lose . mlillions ( or billions in some cases) lay off workers and still get their bonuses from wall street to trash companies. pleasssse!!!

    articles like this really rile me up. then to top it off if you lose money in their stock you can't vote whether they should be fired or not. how's that for job security-anyone here have that kind of security in their job?

  • Report this Comment On February 22, 2013, at 1:58 PM, AllyTheCat wrote:

    usfarbuo.....agree 100% with you

  • Report this Comment On February 22, 2013, at 2:30 PM, Kilemal wrote:

    Now that we've heard from these deeply insightful sources, let's hear from the e trade baby and 9 other toddlers for their sentiments on the outlook for the future of the economy. Comparisons can be odious but my money's on the infants!

  • Report this Comment On February 22, 2013, at 3:03 PM, zzpat wrote:

    When I look at the stock market I see it getting very near all time record highs. I also see corporate profits are well past the highs we had before the Great Recession.

    Where do the negative people in this forum get their news? I'd put money on it that every single one of them is a fox viewer or a conservative republican.

    During the Clinton super boom, they did the same thing. They stayed out of the market because fox and limbaugh told them tax increases would destroy the economy. Instead, we had balanced budgets AND a booming economy.

    The negative comments then are a reflection on the failure of these people to invest in the markets and make some money. For them, life is about whining. Life is about being a life-long conservative victim.

  • Report this Comment On February 22, 2013, at 4:05 PM, usfarbuo wrote:

    zzpat:

    yes, sir, the economy is really booming with gas at 3.80 a gallon and supermarkets prices going up every week. but what can one except when 50% of the population is on the "doles" and "take" and don't have to worry about where their next check is coming from because the government is handing it out every month. i saw the "free phones" being handed out in and around boston and many many votes were gathered there. i'm trying to figure out who they voted for and when i do figure it out i will let everyone know.

    and i'm no fool i've invested since the early 80's regardless of who the president was and i was able to retire early and now am watching the country self destruct and the time will come when the checks run out for the loafers and then the revolution will start. and the U.S. will go the way of rome forever etched in the history books.

  • Report this Comment On February 22, 2013, at 4:16 PM, llamaladysg wrote:

    These CEOs could contribute a great deal to the recovery if they would take the lead in hiring and promote that as a patriotic action to help get the economy back on track. As long as so many people are unemployed or underemployed, there will be a tremendous drag on the economy. Once those people are earning--and spending--again, the economic recovery will accelerate.

  • Report this Comment On February 22, 2013, at 5:59 PM, bluejay107 wrote:

    All the previous and ongoing QE's have created an illusion of economic strength, growth and viability. Time will tell. The only way to guage the true state of the economy is to end the corporate welfare, bailouts and stimulus. Perhaps that is something many of these CEO's fear and need to spout off positive platitudes.

  • Report this Comment On February 22, 2013, at 6:17 PM, dalep24 wrote:

    bail us out or else! that was the biggest bunch of BS of all time. the market is back to post bubble numbers yet our economy still suffers. nothing has changed! next time let them go under!!

  • Report this Comment On February 22, 2013, at 6:21 PM, HerrGlock wrote:

    OMG......Zuckerman is the ONLY one with a clue on what is actually going on!!

    I guess the other CEO's haven't gotten out of their chauffeur driven limos or ivory towers to find out what is REALLY going on, I mean, life for them is GREEEAAAAATTT

  • Report this Comment On February 22, 2013, at 7:25 PM, ChrisBern wrote:

    Mortimer Zuckerman wins for having the best answer. It's really simple-- if you want to find out how strong the economy is, then stop printing $85B a month and stop deficit spending $100B a month, and see what happens.

    The funny thing is, EVERYONE knows what would happen. Yet most people can't see the forest for the trees to know that this is currently an artificial economy, one that could not stand on its own with massive government life support.

  • Report this Comment On February 23, 2013, at 9:20 PM, philkek wrote:

    Thanks to all comments in this writing. I have learned thru the school of HARD KNOCKS that you must do your own homework. Do not believe everything you read or hear.

    Better Business Bureau warns all people to "Investigate BEFORE you invest". MF writers tell fools the same thing.

    Meantime, fool on for profits. My 2c worth.

  • Report this Comment On February 25, 2013, at 2:07 PM, GingerMaster wrote:

    It seems us sheep that were slaughtered in the downturns of 1999 and 2008 are once again venturing into the investment arena.......

    hopeful that THIS TIME the TMF model will lead us to a positive return.

    The early attempts to emulate and allocate have not been positive. Patience and long term due diligence will hopefully change that story.

    It would be a dang shame if TMF was just another shell game for dummies, managed by rats in funny hats.

    Not Foolish enough yet.

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