Top executives project a strengthening U.S. economy over the next six months with gains in employment, capital spending and sales, according to a survey released Wednesday by the Business Roundtable.
The percentage of chief executive officers who expected to add staff was the highest since the quarterly survey began in November 2002.
It was also the first back-to-back surveys in which a greater percentage of CEOs expected to increase staffing instead of cutting it.
Thirty-eight percent of the 116 CEOs surveyed expected their company’s U.S. employment to increase, up from 33 percent in March. Forty-three percent expected no change in employment, while 19 percent expected a decrease.
The Business Roundtable is a 150-member association of CEOs representing an array of industries across the U.S.
“America’s CEOs believe that the U.S. economy will continue to strengthen steadily over the next six months,” said Henry McKinnell, chief executive of Pfizer Inc. and the association’s chairman.
“CEOs expect steady employment gains over the next six months,” he added.
Analysts expect the Labor Department to report on Friday that 225,000 jobs were created in May, according to Bloomberg News.
The economy added 288,000 jobs in April.
Payrolls have increased in each of the last eight months, a streak that last occurred in the 33 months that ended in June 2000. More than 1.1 million jobs have been created since August of last year.
“Not only are the numbers trending upward, but the depth and breadth of hiring has also improved,” McKinnell said. “Our economy appears to have reached a self-sustaining phase of expansion.”
U.S. corporate profits jumped 32 percent in the 12 months ended in March, the biggest increase since 1984, according to the latest Commerce Department figures.
Rising profits have prompted companies to spend more on new equipment and is encouraging hiring.
The executives surveyed by the Business Roundtable expect gross domestic product to average about 3.7 percent this year, matching their March forecast.
The group’s economic outlook index rose to 96.5 in the second quarter from 94.3 in the first three months of 2004.
Any reading above 50 represents an improving economy.
Asked if they expected to change their capital spending during the remainder of the year, 44 percent said they would increase it, while 7 percent said they would cut it.
