Paul Davidson

USA TODAY

The nation’s top CEOs stepped up their hiring and investment plans in the first quarter amid a burst of confidence over President Trump’s pro-business agenda, showing no signs that early political roadblocks had dimmed their optimism.

Meanwhile, small business optimism pulled back slightly but remained near its recent record high.

“CEOs are increasingly positive about the direction of U.S. economy,” Joshua Bolten, the head of Business Roundtable, an association of chief executives of the nation's leading companies, told reporters on a conference call Tuesday. “I think it’s fair to say that CEOs see the business environment as improving with the President’s focus on jobs and growth.”

Forty-one percent of CEOs plan to increase hiring in the next six months, up from 35% in the fourth quarter, according to a Business Roundtable survey. Just 18% expect to reduce employment, down from 30% late last year.

And 46% of the top executives intend to increase capital spending, up from 35%. Just 13% plan to rein in such investment, down from 21%.

Their more expansive plans are rooted in an optimistic outlook. Seventy-eight percent of those surveyed believe sales will rise in the next six months, up from 67% in the prior quarter. Just 4% expect sales to fall, down from 14%.

The Business Roundtable’s overall index, which combines all these elements, jumped to 93.3 from 74.2, the first time it cleared its historical average of 79.8 in nearly two years.

Strong job growth makes Fed rate hike almost certain

Trump’s plan to reduce corporate taxes already has faced hurdles, with many senators opposing a border adjustment tax on imports, for example. And Trump has yet to lay out his $1 trillion plan to upgrade the nation’s crumbling roads, bridges and highways.

But the president has taken steps to roll back financial and other regulations, and that’s largely stoking the executives’ confidence in the administration’s early days. Fifty-two percent of those surveyed said tax reform would be the best policy for creating a pro-growth environment, followed by the 27% who cited regulatory reforms.

Speaking of cutting regulations, Bolton said, “The Trump administration has started off very aggressively and very positively.”

He added, “It’s never easy to do tax reform but this is a great opportunity. We are optimistic that if businesses, Congress and the administration work together, we'll do what we need to get across the finish line.”

And Jamie Dimon, chairman of the Roundtable and the CEO of JPMorgan Chase, said he had high hopes for infrastructure upgrades. “This country has not built a new airport in 30 years,” he said.

Dimon said he wasn’t worried that the Federal Reserve's interest rate hikes will slow the 7 ½-year-old recovery. “If the Fed is raising rates into a strong environment, the strong environment is far more important than a raise of 25 basis points.”

The Fed is expected to lift its benchmark short-term rate by a quarter percentage point at a meeting that ends on Wednesday. That would be just its third hike in the last 11 years, though Fed officials are forecasting at least two more such moves in 2017.

Trump clouds picture as Fed considers interest rate hikes

Separately, a monthly index of small business optimism dipped in February – with hiring and investment plans edging down -- but it remained near record highs following the largest ever monthly increase in December after the election. Small firms took a more cautious view of whether Trump can turn his blueprint into reality, according to the National Federation of Independent Business.

“The sustainability (of the post-election surge in optimism) and whether it will lead to actual economic growth depends on Washington’s ability to deliver on the agenda that small businesses voted for in November,” said NFIB CEO Juanita Duggan. “If the healthcare and tax policy discussions continue without action, optimism will fade.”