Here’s some possibly positive news for you job seekers out there.
A new survey by the National Association for Business Economics (NABE) says hiring plans by companies are at their high levels in over 12 years. Now, if those firms actually followed through on those plans we could be in for a better employment environment.
Industry economists say the primary driver behind this upswing in hiring plans is that economic recovery is gaining strength.
Shawn DuBravac, an economist with the Consumer Electronics Association, explains that a number of factors suggest business decisions are being driven by the fundamentals of an improving economy along with an increase in demand and expanded profit margins.
Some highlights of the survey, which was conducted between December 17, 2010, and January 5, 2011, include:
- Industry demand increased for a sixth consecutive quarter during the final three months of 2010, with about 55 percent of survey panelists reporting rising demand versus 12 percent reporting falling demand. All four major industry sectors experienced demand growth.
- Expectations for economic growth have improved significantly, with a 62 percent percent assuming real GDP growth of two-to-three percent in 2011. One in five panelists is building business plans based on an outlook of three-to-four percent economic growth.
- Profit margins expanded for a sixth quarter in a row as 38 percent of panelists reported that margins rose at their firm, versus 18 percent who reported declining profitability. The nearly 21-point spread between the two responses was the highest since the fourth quarter of 2005.
- Employment continues to improve, with 34 percent of firms reporting larger workforces compared with only 13 percent a year ago. And the hiring outlook for the next six months also looks more robust, with 42 percent indicating their firms will be increasing employment, the highest employment outlook since 1998.
The quarterly survey takes the pulse of some 84 economists for private companies and trade groups. As stated, the plans for more hiring appear to be dependent on the economy continuing to recover. We can only assume that if there is another economic slowdown, those plans could once again be put on hold.
Previous reports have revealed that corporate America has been sitting on $2 trillion waiting until the economic picture brightened.
The NABE survey found the share of firms increasing their capital spending from the previous quarter rose only slightly from the prior survey to 38 percent. Expectations for future capital spending, however, improved significantly with 62 percent reporting higher planned expenditures, up from 48 percent last quarter.
As for the expected effects of the proposed 2011 tax package, more than half (53 percent) of the panelists -- especially those from the goods-producing sector -- anticipate a favorable impact on their firm’s sales. Overall, 60 percent said they do not anticipate any increase or decrease in investment spending or employment in response to new tax policies.
More than half of the respondents indicated that some portion of their firms’ sales came from foreign-based operations, with 14 percent reporting that more than half of their sales were from foreign sources. Of those with sales from foreign operations, 44 percent indicated their share of sales from foreign sources increased in the last quarter.