NEW YORK – Just about one in three firms increased payrolls in the second quarter and 39% of respondents expect to hire in the next six months, according to the latest National Association for Business Economics survey, released Monday.
A year ago, only 6% of firms saw gains in employment. The 39% expecting to hire is the highest level of hiring intentions since January 2008, NABE said. The number of firms cutting jobs dropped to 14% from 36% a year ago.
While expectations for economic growth in 2010 were down slightly from last quarter, NABE said, they remained positive, 20% of survey respondents believe real GDP will expand by more than 3% compared with 24% of survey respondents who expected that rate of growth in April. Sixty-seven percent of respondents still believe the economy will expand by more than 2.0% in 2010.
Industry demand increased for a fourth consecutive quarter, but the pace of growth appeared to weaken during the latest quarter. “After climbing to 51 in April its highest level in more than four years the Net Rising Index (NRI) slipped to 42 in July,” NABE said in a statement. “This index measures the percentage of firms reporting stronger conditions less the percentage reporting weaker conditions. All four major industry sectors recorded demand growth, but NRIs varied widely ranging from a high of 69 for the goods-producing sector to a low of 16 for the finance, insurance, and real estate sector.”
Nearly a quarter of firms said they increased their capital spending over the prior quarter, similar to the results over the past year, but expectations for future capital spending inched up to 44% from 41% in April. “As in the past five surveys, expectations were positive for spending on computers and communications equipment, but negative for spending on structures,” NABE said.
Materials costs continued to rise, according to the survey.
