WASHINGTON – Oct. 26, 2009 – An economic survey out today provides fresh evidence that a fitful recovery is underway as customer demand grows in the third quarter for the first time in more than a year and the jobs outlook brightens a bit.
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For the first time since the recession began, the portion of companies planning to add employees in the next six months outnumbered those expecting to cut jobs, according to this month’s quarterly survey of economists at 78 firms by the National Association for Business Economics.
Twenty-four percent plan to grow their workforce, 20 percent say they’ll trim staff and 57 percent expect no change. In July, 18 percent expected to add workers, while 28 percent said they would scale back. “It’s a little ahead of what I was expecting,” says Ken Simonson, chief economist at the Associated General Contractors of America, who helped conduct the survey.
Simonson estimates unemployment, now 9.8 percent, will peak at 10.5 percent in the second quarter, in line with other economists. But he said the survey’s better-than-expected jobs outlook could mean the jobless rate will crest earlier at a slightly lower level.
Most bullish were services companies: 31 percent say they’ll add workers in the next six months, up from 16 percent in an April survey. Just 3 percent say they’ll cut staff. By contrast, 12 percent of manufacturers plan to beef up their workforces.
Lester Keizer, owner of computer services firm Connecting Point and wireless broadband provider LasVegas.Net, plans in the next two months to hire up to five employees at the two Las Vegas firms that now employ 41. He cites customers that put off plans for cybersecurity features during the downturn and an upswing in outsourcing by companies that laid off technology specialists.
“I feel like there’s an, ‘Ahh,’ where people are saying, ‘Maybe we’ve just hit bottom,’” Keizer says, noting he cut a few workers in the slump as sales plunged.
Other survey findings:
• Forty-four percent of firms reported rising customer demand, vs. 21 percent with falling demand, the first time gainers outpaced losers since July 2008. Only the transportation, utilities and communication sectors posted a net decline.
• More respondents reported an increase in capital spending from the prior quarter, for the first time in a year.
• Companies that had rising profits compared with the previous quarter outpaced those that had drops for the first time in nearly two years.
• The portion of firms chopping jobs fell to 31 percent from 36 percent in July. Those adding rose to 12 percent from 6 percent.
© USA Today
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