WASHINGTON — More companies plan to increase payrolls and invest in new equipment this year as demand strengthens and credit availability improves, a quarterly survey of economists showed.
The percentage of businesses expecting to hire in the next six months exceeded the share projecting more firings by 6 points, according to a survey by the National Association for Business Economics issued Monday in Washington. Expectations for capital spending improved for a fifth straight quarter.
Companies are upgrading their outlook as sales and profits increased for a second quarter, the report showed. While current employment conditions remain negative, improved prospects for future hiring signal the two-year collapse in the job market is closer to ending.
"The U.S. recovery from the Great Recession continues, albeit at a slow pace," William Strauss, a senior economist at the Federal Reserve Bank of Chicago who analyzed the results, said in a statement. "Job losses have been moderating with a slightly improved outlook for hiring."
Sixty-three percent of respondents reported that concerns over health care and environmental or tax legislation have had no effect on their hiring plans for this year. The report also showed 69 percent said President Obama's $787 billion stimulus plan passed in February "has had little impact on employment to date."
The economy lost 85,000 jobs in December after a gain of 4,000 the prior month, the first positive reading in almost two years, the Labor Department reported Jan. 8. Economists surveyed by Bloomberg News this month forecast unemployment will average 10 percent this year, even as most economists anticipate the economy will begin creating jobs in coming months.
Twenty-nine percent of respondents said they anticipate an increase in hiring within the next six months, compared with 24 percent in October, NABE said. Forty-four percent said they expected their firms to boost spending in the next year, up from 39 percent in the prior quarter.
"Capital spending has continued to improve from very low readings following the start of the financial crisis," said Strauss. "Improving credit conditions might be part of the explanation, with many respondents indicating that credit still remains tight but less so than in recent months."
This month's survey showed 35 percent said credit conditions adversely impacted their business, down from 42 percent in October and 54 percent in the July survey.
The sales gauge improved to a net 25 percent after a net 23 percent in the prior quarter, the first back-to-back positive reading since July 2008. The measure of profits posted its first consecutive positive reading in two years.
The group's net figures subtract the percent of respondents reporting falling results from those reporting an increase. Some 75 panelists responded to the survey, conducted Dec. 18 to Jan. 7.
All the respondents said they anticipated the economy will expand in 2010, with 62 percent saying the economy would grow by more than 2 percent, compared with 45 percent in the October survey. The median estimate of 60 economists surveyed by Bloomberg this month projected a 2.7 percent growth rate for this year.