Chief Executives Expect to Increase Hiring, Survey Says
By DAVID LEONHARDT
hief executives of the nation's largest companies say they are finally ready to begin hiring again.
For the first time in at least a year and a half, more top executives plan to increase employment in the United States over the next six months than plan to cut it, according to a survey released today by the Business Roundtable, a lobbying group. Thirty-three percent of the executives said they would add jobs, up from just 12 percent in October, while 22 percent said they would reduce their payrolls.
"C.E.O.'s believe that the U.S. economy is on course for continued steady improvement," said Hank A. McKinnell, chairman of the Roundtable and chief executive of Pfizer, the drug company.
But Dr. McKinnell added that he still did not expect job growth this year to reach the levels of past recoveries, largely because companies have become more efficient and can produce more goods with fewer hands. Asked if he expected the economy to add 200,000 to 300,000 jobs a month, as it did through parts of the 1980's and 90's, Dr. McKinnell said, "We're not quite that bullish at this point."
But he added, "We're headed in that direction."
Separately, a survey of midlevel executives across the service sector suggested that economic growth would remain healthy but that job growth would be moderate. The Institute of Supply Management's service-sector index fell to 60.8 in February, from 65.7 in January, while the employment index for the sector dropped slightly, to 52.7 from 53.4.
Any number above 50 suggests growth.
"February was a month of growth, but just not the same pace as we had seen in the month of January," said Drew T. Matus, an economist at Lehman Brothers. "This is still a strong number."
After the release of today's reports, the dollar rose to a three-month high against the euro, while prices of Treasury securities fell, pushing interest rates higher. And the major stock indexes declined modestly.
Even though the American economy did grow rapidly during the second half of last year, employment growth remained meager. From July to January, the economy added about 56,000 jobs a month, far too few to keep up with population growth.
Economists are expecting the Labor Department to report on Friday that roughly 125,000 to 150,000 jobs were created in February, a gain that would be the biggest since late 2000.
The outsourcing of American jobs to lower-wage countries has become a hot topic in the presidential campaign and the news media, but most economists say that the productivity gains are the main cause of the weak job growth.
Dr. McKinnell echoed that argument today, calling outsourcing "a fact of life" and noting that the pharmaceutical industry has actually brought a large number of research jobs into the United States from other countries in recent years. His concern, he said, was that American elementary and high schools were not strong enough to produce workers for high-skill, high-wage jobs.
"Some of these jobs are going abroad for cost reasons," he said. "Others are going for capability reasons."
In the Business Roundtable survey, 88 percent of executives said they expected their sales to increase in the next six months, down from 93 percent in December. Only about 1 percent, or one executive, expected a drop.
Of the Roundtable's 150 members, 122 completed the survey, the group said. The survey was first conducted in late 2002 and until this month the number of executives planning job cuts had always outnumbered those expecting to increase their payrolls.
Over the next six months, 43 percent of the executives plan to increase their spending on new plants, equipment and software, and 50 percent said their investment would not change.
The executives expect the economy to grow 3.7 percent this year. Wall Street forecasters are more optimistic, predicting about 4.5 percent growth on average. Since the economy began to slow in 2000, executives have generally been less optimistic, and more prescient, than professional economists. |
