More than two-thirds of U.S. chief executives plan additional layoffs and expect sales to decline in the next six months as their confidence in the economy continues to fall, according to a survey released on Tuesday.

The Business Roundtable's quarterly CEO Economic Outlook Index fell to negative 5 -- the first negative reading in the survey's six-year history -- and down from a fourth-quarter reading of 16.5. A reading below 50 means CEOs expect contraction rather than growth.

This quarter's results reflect the complex ongoing challenges currently at work in the U.S. economy, said Harold McGraw, who serves as Roundtable chairman and is also chief executive of publisher McGraw-Hill Cos. Reduced consumer demand both here in the United States and abroad has placed significant pressure on American businesses.

One hundred U.S. CEOs were polled between March 16 and March 27 -- during the recent rally in U.S. stocks -- said they now expect real U.S. gross domestic product to decline 1.9 percent this year. That is below their December forecast, which anticipated flat GDP.

The majority of CEOs -- 71 percent -- said they expected to cut their U.S. work forces over the next six months and 66 percent said they expect to reduce capital spending. That came as 67 percent said they expect lower sales over that period.

McGraw said efforts by the Obama administration to stimulate economic activity were starting to pay off, citing the rebound in U.S. stocks over the past month.

While recently implemented policies need time to make an impact they have already begun to restore confidence in our markets, which is obviously a critical first step, McGraw said.

Businesses still see tough times ahead. Diversified U.S. manufacturer Emerson Electric Co on Tuesday cut its profit target for the year, and investors are awaiting a report from Alcoa Inc later today that is expected to show a second consecutive quarterly loss for the U.S. aluminum producer.

But McGraw argued the U.S. economy may be reaching a bottom.

We are very close to a bottom and the fourth quarter of last year and the first quarter of this year will probably be the most disappointing, McGraw said. We'll probably see the pace of decline slowing down and we could see positive growth in the fourth quarter.

Business Roundtable member companies together employ almost 10 million people and generate about $5 trillion in annual revenue.

(Reporting by Scott Malone, editing by Dave Zimmerman)