Finance execs regain some optimism, but few plan to hire
Posted December 6, 2010
Updated December 7, 2010
Chapel Hill, N.C. — Finance executives across the U.S. have regained some of their optimism about the future of the economy, but most don’t expect a return to pre-2008 recession business before the end of next year.
The mixed results were reported Monday morning by the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill and the Durham-based American Institute of Certified Public Accountants.
“This quarter’s executives’ outlook for the U.S. economy was marked by a fair degree of uncertainty,” the new report says. “The largest number (43 percent) of respondents indicated that they had a neutral outlook for the economy. About equal numbers of respondents expressed optimism and pessimistic views.”
Survey data came from CPAs who hold a variety of executive level positions across manufacturing, high tech, life science and other sectors in addition to finance.
For job hunters, however, the report included little good news.
Only 10 percent of companies plan to add workers in the near future, up from 9 percent the previous quarter. The number of firms planning to reduce payroll remained flat at 12 percent.
Jeff Stephenson, who oversees a State Farm insurance office in Durham, is among the small number who are now hiring.
"It's tempting sometimes, with the economy, to maybe not replace somebody when you lose him, but at the same time, you don't want to go backwards," Stephenson said. "I want my business to grow. I'm not willing to let my competitors get ahead of me."
Twenty-two percent of those surveyed acknowledged their companies were short-handed but were reluctant to hire. Fifty-four percent said their organizations had an “appropriate number” of workers, down from 55 percent in the previous survey.
"We've seen a bounce in optimism, but it's tempered by caution," said Carol Scott, AICPA's vice president of business, industry and government. "(Companies) see plans for expansion, but the jobs are not following yet."
The optimism was largely driven by executives who saw positive benefits from the mid-term elections in which Republicans won more than 60 seats in the U.S. House and cut the Democrats’ edge in the Senate.
The report noted “those feeling more optimistic outnumbered those feeling more pessimistic by a 4-to-1 margin, with the election results being frequently cited by the respondents as the reason for their increased optimism.”
"It's a slow, cautious recovery. It's not going to be a quick turnaround," Scott said.
The report, which was conducted last month and drew 1,443 respondents, was an improvement over the previous quarterly outlook.
Optimism about the economy improved to nearly 30 percent after plunging from 40 percent to 20 percent in August results.
The finance executives also showed more optimism about their own companies, climbing back to 51 percent from 46 percent.
Executives at large companies with revenues of more than $1 billion were the most optimistic with 70 percent of the respondents saying their firms planned to expand in 2011.
Among the smallest firms, 54 percent of the executives said their firms had growth plans.
Professional services, technology and retail ranked as the most optimistic industries, while construction, real estate and health care were the most pessimistic.