Four years into a sluggish recovery marked by modest hiring, the economic horizon looks pretty much the same in the eyes of the nation’s top corporate bosses.
The latest quarterly survey by Business Roundtable, representing chief executives of major companies, found just a slight improvement in the outlook for economic activity in the next six months, with a small pickup in sales and hiring.
The results released Wednesday “reflect an economy on the slow road to recovery,” said Jim McNerney, CEO of Boeing Co. and chairman of Business Roundtable. The survey was completed by 141 CEOs in the second half of May.
Business Roundtable said 32 percent of these CEOs expected an increase in U.S. employment at their companies in the next six months, up from 29 percent in the first quarter. But 26 percent forecast a decrease, and that’s up one percentage point from three months earlier. The rest see no change in employment.
The American economy has added an average of 176,000 net new jobs a month in the past 12 months. That might be adequate for an economy at or close to full employment, but the U.S. jobless rate stands at 7.6 percent and there are 11.8 million people officially unemployed – about 4.5 million more than there were before the recession began in late 2007.
Business Roundtable member companies are among the largest in America and, combined, employ about 16 million people. In this recovery, which began in mid-2009, small companies have been particularly slow to hire as they have struggled with sales and financing. Big multinational businesses have far outperformed in sales but haven’t provided much juice to employment either, generally adding more people overseas than in the U.S.
McNerney, in a conference call with reporters Wednesday, attributed the “pretty muted and across-the-board” weakness in domestic hiring to the anemic rate of economic growth, as well as some skill mismatches and the continued political inaction on longer-term budget issues, such as taxes and spending for healthcare and Social Security.
“I think it remains constrained until we get some certainty,” McNerney said.
Still, 78 percent of Business Roundtable executives surveyed in the second quarter expect their sales to increase in the next six months, up from 72 percent who said so in the first quarter.
They were not nearly as optimistic about their investment plans: 37 percent of CEOs reported that they expected their capital spending to rise in the next half year. That was down from 38 percent in the first quarter.