04/09/2012 08:32 am ET | Updated Jun 09, 2012

A Mixed Economic Picture

I've just spent an interesting weekend with a group of CEOs discussing the global economic outlook, and how firms are striving to compete and grow in a challenging economic environment. They described a world of rapid change, financial and stock market volatility, and uncertainty. On balance, they are fairly upbeat about the U.S. economy, but have major concerns about Europe, China, and -- of course -- what's going on in Washington.

After major restructuring, most companies have dramatically reduced their breakeven points and strengthened their balance sheets so they can generate good earnings even in this slow growth environment. The CEOs believe that the U.S. economy is in better shape than most of the rest of the world, and is today the best place to invest.

There was uniform agreement that Europe is in a recession and has done little to reduce its sovereign debt problem. More specifically, Spain's economy is in deep trouble and will have difficulty financing its debt this spring. There were similar concerns about Italy and France. In general, the CEOS are skeptical that the Euro community has put in place the kinds of reforms necessary to make them more competitive and reduce debt.

Few companies see a slowdown in China as a problem. Rather, the majority see China as a big opportunity as the Chinese hike investment in infrastructure and switch to a more consumer driven market. The CEOs were concerned about intellectual property protection and unfair business and trading practices by the Chinese. Many companies believe the Chinese government will always tip the scales in favor of Chinese firms, discriminating against U.S. business.

I contended the recent run-up in the stock market was in large measure due to the easy credit environment driven by zero interest rates here, a short-term central bank bailout in Europe, and quantitative easing by most central banks. While it is clear that these actions have helped restore economic growth in some areas, particularly mining, oil, housing, commodities, and finance, there have also been negative impacts on economic fundamentals. More importantly, there is growing concern that more quantitative easing will stoke the fires of inflation either here or abroad.

Overall, there was near uniformity of opinion among the CEOs that the U.S. will experience 2% to 2.5% growth in the months ahead. Although not satisfied about that, most of the CEOs felt quite able to operate profitably in that environment. They all stressed that they have in place lean manufacturing, new sourcing practices, and new product development that will allow them to be successful in both this country and abroad. Moreover, virtually everyone in the room was looking at acquisitions as a possible add-on to their organic growth models.

They were not so optimistic about employment. All the companies were concerned about the high level of unemployment and inadequate training of the U.S. workforce. Friday's weak -- 120,000 payroll -- number reinforces their view that too many workers are being left behind in this weak recovery, either because of weak growth, inadequate skills, or uncertainty emanating from Washington. What we need now is a public-private partnership backing a bi-partisan, pro-manufacturing, pro-growth agenda that creates jobs.

Jerry Jasinowski, an economist and author, serve d as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.