The economic outlook among CEOs remained strong in the third quarter of 2018, according to the results of the latest Business Roundtable CEO Economic Outlook Survey.

However, the Q3 CEO Economic Outlook Index — a composite of CEO expectations for sales and plans for capital spending and hiring over the next six months — decreased slightly as business leaders experience uncertainty and negative effects from the Trump administration’s actions on trade.

This quarter’s index was 109.3, a decline of 1.8 points from 111.1 in the second quarter of 2018. This is the seventh straight quarter where the index has exceeded its historical average, signaling a continued positive direction for the U.S. economy.

According to Joshua Bolten, Business Roundtable president and CEO, this quarter’s survey results “signals a good strong direction for the U.S. economy.” In a webcast on Monday, Bolten also said that he sees how the “increased uncertainty around trade policies is having a negative effect.”

“The administration’s regulatory agenda and especially tax reform have created substantial tailwinds for our companies’ job creation and capital investment,” Bolten said. “However, in recent months, these positive trends have now been running up against what looks to be substantial and growing headwinds from the administration’s trade policy agenda.”

To see how trade policy decisions are influencing CEO and company decisions, Roundtable CEOs were asked a special question regarding the effect of U.S. trade policy on capital investment in the Q3 survey.

Nearly two-thirds of responding CEOs said that recently enacted tariffs — along with other changes to trade policy and uncertainty about future trade actions — will have a moderate or significant negative effect on their companies’ capital investment decisions over the next six months.

Bolten added that “just 2%” saw a moderate or significant positive effect on capital spending as a result of trade policy.

“Contrary to the assertion that new tariffs and trade restrictions are making our economy stronger, almost none of our companies see it as a positive,” Bolten said during the webcast.

According to Bolten, the negative effects on capital investment have important implications “not only for our member companies but for their suppliers as well, many of which are small- and medium-size businesses who will be squeezed by decreased business investment and equipment and facilities,” he said.

The survey didn’t specifically ask what concerns CEOs the most on the trade front. However, from Bolten’s view, member CEOs’ concerns include both China tariffs and NAFTA renegotiation.

“Some of our companies are heavily engaged with NAFTA, others have much more at stake in trade relations with China, but almost all of them have pretty deep anxiety about the use of tariffs as a principle tool of U.S. trade policy,” Bolten explained. “It harms their supply chain, [and] it makes their products more expensive here in the United States.”

He also said that most of the tariffs have ended up making American companies less competitive overseas.

The survey also includes three sub-indexes that measure CEO plans for hiring, capital investment and sales expectations.

This quarter’s results saw CEO plans for hiring declined 2.9 points to an index of 92.6, which is the third-highest value for the employment sub-index in the survey’s history. Meanwhile, plans for capital investment also fell in the third quarter by 4.4 points to an index of 103.2.

Expectations for sales, however, increased to 132.3, up 2 points from the previous quarter and the second-highest value of the sales sub-index since the second quarter of 2011.

In their fourth estimate of 2018 U.S. GDP growth, CEOs projected 2.8% growth for the year, up slightly from their 2.7% estimate in the second quarter.

The Business Roundtable CEO Economic Outlook Survey, conducted quarterly since the fourth quarter of 2002, provides a forward-looking view of the economy by Business Roundtable member CEOs.

Business Roundtable CEO members lead companies with nearly 15 million employees and $7.5 trillion in revenue.

The combined market capitalization of Business Roundtable member companies is the equivalent of more than 27% of total U.S. stock market capitalization, and Business Roundtable members invest nearly $147 billion in research and development — equal to over 40% of total U.S. private R&D spending. Business Roundtable companies pay $296 billion in dividends to shareholders and generate $488 billion in revenues for small and medium-sized businesses.