Saying many of their employees are “maxed out,” U.S. companies plan to boost hiring by 2.5 percent over the next year, chief financial officers say in a new survey from Duke University and CFO Magazine.
“More than one out of four U.S. CFOs say their employees are maxed out, so the planned increase in payrolls is long overdue,” said Kate O’Sullivan, editorial director at CFO Magazine.
Based on the survey of more than 800 CFOs from private and public companies, the Duke-CFO report projects that U.S. unemployment will decline to “near 7 percent withing a year, if all else remains constant,” O’Sullivan said.
The U.S. jobless rate climbed to 8.2 percent in May.
(A new survey out Thursday is much gloomier about hiring. Read here.)
However, despite the plans to increase hiring, CFO optimism about the economy declined from a score of 59 from the last quarter to 56 for the July-September time frame. The maximum score is 100.
“Most firms continue to stockpile cash because of great economic uncertainty,” the Duke-CFO report says.
“The drop in optimism is a bit worrisome for the U.S. because historically a drop in optimism foretells slower economic activity over the next year,” said John Graham, a Duke Fuqua School of Business professor and director of the survey. “On top of that, falling Asian, European and Latin American optimism confirms that the world economy is slowing. Combined with reduced plans for U.S. capital spending, overall domestic economic growth will likely continue to soften over the next year even as hiring ticks up slightly.”
The global economic outlook also declined for the coming quarter, slipping to a score of 58 from 65 for Asia and 52 from 54 for Europe. The Latin America score remained at 54.
It’s the first time in the 16-year history of the survey that the Asian and U.S. optimism scores are “nearly the same,” the authors noted.
Corporate earnings are expected to grow 11 percent.
In good news for high-tech firms, technology spending is expected to increase 8 percent.
Overall capital spending is forecast to grow 5 percent, a decline from 7 percent or more from the previous two surveys.
Advertising spending is projected to grow by 3 percent.