CEOs see strong sales despite sluggish economy

NEW YORK (CNNMoney.com) -- Chief executives at America's top companies expect sales and hiring to pick up next year, although the outlook for economic growth remains lackluster, according to a survey released Tuesday.

The Business Roundtable, an association of CEOs at large U.S. companies, said in its fourth-quarter survey that 80% of its members expect sales to increase in 2011. Nearly one in six expect to invest more in their businesses. 45% of them plan to increase hiring over the next six months.

Despite the improved outlook, business leaders surveyed expect economic growth to be subdued next year. According to the survey, they see gross domestic product growing by 2.5%.

The forecasted improvement in sales is "good news" because it suggests that "demand is returning," Ivan Seidenberg, CEO of Verizon (VZ, Fortune 500) and chairman of the Roundtable said in a statement.

"When demand increases, capital expenditures and employment follow -- which is what we expect to see in the next six months," he said.

Seidenberg did acknowledge that economic conditions remain far from robust: "There is still more work that needs to be done to get the economy back on the path toward strong, sustainable growth."

Still, the survey showed that business conditions have been gradually improving since the recession took hold two years ago.

After falling to a low of 18.5 in the second quarter of 2009, the Roundtable's CEO economic outlook index rose to 101 in the fourth-quarter of this year. That's its highest level since the first quarter of 2006.

The survey also showed that corporate leaders are concerned about rising prices for basic commodities such as copper, corn and cotton. The CEOs also said rising health care spending was their second-largest expected cost pressure next year after commodities.