NABE: U.S. Companies Expected To Hire, Spend More Into 2010
10/26/2009 6:12 AM ET
(RTTNews) -
U.S. companies are expected to hire and invest more in the next six months, a survey report from the National Association for Business Economics showed Monday. The group's latest Industry Survey reinforces the view that a recovery is well underway in the world's largest economy.
Firms were confident of economic growth in the next year, with 73% of respondents expecting the real GDP to expand between 1% and 3% in 2010, the survey found. The NABE Industry Survey was conducted between October 2 and October 12 and presents the responses of 78 NABE members regarding business conditions in their firm or industry.
Industrial demand grew for the first time in five quarters in the July to September period, with the goodsproducing sector, services sector and the finance, insurance & real estate sector, all reporting a rise in demand. Further, profit margins were on the rise for the first time in seven quarters, albeit at a modest pace.
Unemployment levels appeared to be easing, the NABE said, with the percentage of firms cutting payrolls declining to 31% from 36% in the last survey. The percentage of firms adding jobs stood at 12%, doubling from the all-time low of 6%. Moreover, the number of panelists expecting their firms to add more jobs exceeded the number expecting job cuts, for the first time since the recession began.
Survey respondents reported a rise in capital spending over the prior quarter for the first time since October 2008. Expectations for future spending improved for the fourth straight quarter and the balance turned positive for the first time in a year.
A reduction in inventories was indicated by 46% of the respondents in the third quarter, with firms attributing it to cost cutting measures. On the other hand, 18% of firms reported replenishing inventories in anticipation of higher sales. Prices are expected to rise, with the share of respondents expecting price increases in the next three months exceeding those expecting cuts by 15 percentage points, a margin not seen since July 2008.
by RTT Staff Writer
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