US firms plan to hire; service sector lags -survey

WASHINGTON, July 19 (BestGrowthStock) – Plans by U.S. firms to
increase payrolls over the next six months have risen to the
highest level since January 2008, but some service sector
companies still see layoffs, according to a survey released on
Monday.

The survey by the National Association for Business
Economics (NABE) also showed strong demand in the
goods-producing sector, while service sector businesses
reported a softening in their expansion rates.

The results echo recent trends in the U.S. economy.
Although the services sector dominates the economy, the
manufacturing sector has led the recovery. Layoffs in the
services sector could further slow the recovery.

The survey showed that half of the 79 NABE members who took
part expected to increase payrolls.

In the services sector, of the 28 respondents, 4 percent
saw layoffs over the next six months, 36 percent planned to
hire more workers, while 57 percent saw no change in payrolls.

“Only the services sector continues to anticipate layoffs,”
the NABE said in a statement.

The survey was conducted from June 11-29.

After sturdy job gains early this year, the labor market
lost strength in recent months, hurting consumer spending and
helping to slow the pace of the recovery from the worst
recession since the 1930s.

Still, the NABE noted that layoff and attrition activity
declined to 14 percent of respondents from 28 percent a year
ago.

In the second quarter, the percentage of respondents
reporting increases in employment touched its highest level
since the second quarter of 2007.

“Over the past two quarters the goods-producing sector has
experienced a dramatic recovery in hiring trends,” the NABE
said, noting that 42 percent of respondents in the sector
reported increased hiring in the current survey, up from zero
in January.

The survey also found that about a quarter of respondents’
companies had increased capital spending in the second quarter,
with the finance, insurance and the services sector dominating.
Transportation, utilities, information and communications
sector respondents reported no increase in capital spending.

Industries reported a slowing in the demand growth rate
during the second quarter, the survey showed.

Economists have revised down their forecasts for
second-quarter gross domestic product growth, on expectations
that economic growth slowed in the period.

“Demand growth, though slower in the aggregate than during
the first quarter of the year, remained broad-based, with all
four major industry sectors expanding for a second consecutive
quarter,” the NABE said.

Strong demand was reported in the goods-producing sector,
while the finance, insurance, and real estate sector accounted
for the deceleration in overall industry demand.

About 59 percent of the firms believed Europe’s sovereign
debt crisis would have no impact on them, while 35 percent
worried they could be hurt.
(Reporting by Lucia Mutikani; Editing by Leslie Adler)

US firms plan to hire; service sector lags -survey