According to the Business Roundtable, business leaders are dimming their outlook on the U.S. economy, saying uncertainty over tax and trade policy could fester throughout next year and discourage company spending.

A measure of the economic outlook among chief executive officers slipped to 85.1 in the current quarter from 86.4 in the third quarter, the Business Roundtable said. The survey of 129 CEOs reflects expectations for the next six months of sales, capital spending and employment.

Lowered expectations of business investment drove the index’s overall decline. CEOs also downgraded their outlook on sales, though they boosted expectations of hiring.

A recent survey showed most CEOs—74%–still expect their company’s sales to climb over the next six months. But 9% forecast a decline, up from 7% who said so in the third quarter.
Just over a third—36%–expected to increase capital spending over the next six months while 13% planned a decrease and 50% saw no change. Four in 10 CEOs expected to boost hiring while 36% saw no change in employment and 23% forecast a decline in employment. The consensus is that companies are icing investment plans until they get a better sense of what their tax bills will be over the long term.

Congress is debating whether to extend a raft of tax breaks set to expire and lawmakers aim to reach a deal before the new Congress takes over early next year.