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Business Council says it got survey wrong

Chief executives in the United States are not as pessimistic as the Business Council thought last week when it issued its economic survey, the group said on Tuesday, citing a "tabulation error."
/ Source: Reuters

Chief executives in the United States are not as pessimistic as the Business Council thought last week when it issued its economic survey, the group said on Tuesday, citing a "tabulation error."

The Business Council, a group of 125 U.S. CEOs, last week said 70 percent of its members expected flat to 2 percent growth in the U.S. economy next year — painting a much more bearish outlook than major economists.

But on Tuesday, the group said it had gotten the survey wrong and its members had actually projected moderate to solid economic growth in 2005, from 2.1 percent to 4.5 percent, and were "guardedly optimistic" about the economy's prospects.

The U.S. economy grew at a 3.3 percent annual rate in the second quarter.

"Today's revision confirms that the outlook is considerably more positive than originally thought and provides better alignment between projected economic growth and the sales and profits anticipated from their own firms by the council members in 2005," said David Berson, chief economist of Fannie Mae , the largest U.S. home funding company, in a statement.

Berson prepared the Business Council survey, which is often seen as a gauge of corporate sentiment. Last week, executives had cited consumer and business sentiment, high oil prices and terror threats as uncertainties hanging over the economy.

Some executives attending the Business Council meeting in Irving, Texas, last week had been puzzled by the sluggishness reflected in the survey's consensus forecast, adding that their own growth projections were stronger than the survey's.

The revision comes in the midst of an election year that has put a spotlight on the state of the economic recovery. Business Council Executive Director Philip Cassidy said the correction was not influenced by politics in any way.

"It was a computational error. The spreadsheet shifted so the wrong numbers appeared in the wrong columns," Cassidy said. "It was just one column on the spreadsheet."

He said the error, which was caught on Friday afternoon, has never happened before in the survey's history.