CEOs becoming more willing to hire: Roundtable

By Scott Malone

BOSTON (Reuters) – U.S. chief executives’ view of the economy brightened in the first quarter, with more than half now ready to add jobs — a critical step if the economy’s recovery is to gain steam.

The Business Roundtable’s quarterly CEO Economic Outlook survey found that 52 percent of the 142 CEOs who responded to the survey plan to add staff in the United States over the next six months — the highest reading since the group began doing the survey in late 2002.

The CEO economic outlook index also hit a record high.

“Our CEOs see momentum in the U.S. economy. We collectively are expecting increased sales and as a result expect to do more investing and hiring over the next six months,” said Ivan Seidenberg, CEO of Verizon Communications Inc, who serves as the group’s chairman.

But he cautioned that many of the survey responses came before the March 11 earthquake that set off Japan’s current nuclear crisis, and noted that the after-effects of that event, as well as oil’s rise back over the psychologically important $100 per barrel mark, would weigh on corporate confidence.

“The question of how deep this goes throughout the economy is a different question. And there we still need a lot more information,” Seidenberg told reporters on a conference call.

CEOs’ changed views on hiring would be very good news for an economy that has struggled with high unemployment even since its last recession officially ended in June 2009 and for the administration of U.S. President Barack Obama, who has faced criticism for his handling of the economy. The U.S. unemployment rate stood at 8.9 percent in February.

It is also in line with other recent data, including a Wednesday report from payrolls processor ADP that said the U.S. private sector added 201,000 jobs in March.

One reason job creation has lagged behind the U.S. recovery is that companies have been reluctant to hire workers until they saw firm evidence of rising demand and even then they have been more likely to add lower-paid employees outside the United States, said Jeff Joerres, CEO of staffing company ManpowerGroup Inc.

“We are signing up for three or four years before we get back to a 7 percent unemployment rate,” Joerres said.


A key factor driving CEOs’ increased confidence is sales growth, which 92 percent said they expected over the next six months. Sixty-two percent said they planned to boost capital spending over the that period.

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CEOs now look for U.S. real gross domestic product to rise 2.9 percent in 2011, up from their prior forecast of 2.5 percent growth.

The Roundtable’s quarterly CEO Economic Outlook index — which measures all these variables — surged to 113.

Investors will get a more detailed read of corporate America’s economic outlook over the month, as big companies from Alcoa Inc to General Electric Co to JPMorgan Chase & Co report first-quarter results.

The Roundtable, whose nearly 200 member companies collectively generate close to $6 trillion in annual revenue, conducted the survey between February 28 and March 18.

(Additional reporting by Nick Zieminski; Editing by Dave Zimmerman and Steve Orlofsky)

CEOs becoming more willing to hire: Roundtable