Survey: Execs don't see job growth on horizon
Posted February 23, 2010 2:40 p.m. EST
Updated February 23, 2010 2:55 p.m. EST
Chapel Hill, N.C. — If you are looking for a job, the prospects of finding one remain grim, according to a new survey of financial executives.
Those surveyed don’t expect a rapid return to the pre-recession economy any time soon.
The American Institute of Certified Public Accountants and the University of North Carolina's Kenan-Flagler Business School’s quarterly survey was released Tuesday.
The jobs environment remains grim with national unemployment running at nearly 10 percent.
Only 6 percent of those surveyed said their companies have too few employees and are planning to hire.
Just 8 percent expect employment to return to pre-recession totals this year, and 29 percent don’t forecast such a rebound “in the foreseeable future.”
Another 23 percent said they have too few workers but are reluctant to hire.
Meanwhile, 15 percent said they still had excess employees.
Some 54 percent of firms say their work forces are “appropriate.” (For the full report, click here.)
Top concerns for the executives’ firms are the same for the third consecutive quarter:
- Customer demand
- Employee health care costs
- Access to capital/cost of capital
The survey was conducted between Jan. 27 and Feb. 15 and included 998 respondents, 66 percent of whom were chief financial officers. The vast majority – 70 percent – were from the private firms, 10 percent from public companies, 16 percent from the public sector and 4 percent from foreign owned firms.
A number of survey findings were encouraging, noted Kenan-Flagler professor Mark Lang.
"This quarter's results continue a promising trend," he said. "Optimism among CPA financial executives about sales and profit growth are improving, and spending plans are beginning to follow suit. The only missing piece is employment growth, which is starting to pick up but continues to lag. Many companies are understaffed, but are waiting for more certainty before they hire."
In another bright note, optimism about prospects for their own companies vaulted to more than 40 percent, the highest level since July of 2008.
"It is good to see signs of optimism, especially from the manufacturing sector," said Carol Scott, CPA, AICPA vice president for business, industry and government. "Unfortunately 40 percent of our CPA members in business and industry -- chief financial officers, controllers and CPA financial professionals – are now telling us that they do not expect their business to return to pre-recession levels until 2012 and beyond."
Overall optimism declined to some 25 percent, a slight drop after increases over the previous two quarters. Just a year ago, the level of optimism was sound 5 percent.
“Concerns about unemployment, the commercial and residential real estate markets, the federal deficit and its impact on the federal debt, and actions being taken by the federal government continue to drive pessimism about the US economy as a whole,” the survey’s authors said.
“While some respondents identified observations of increased demand and improving economic indicators as reason for increased optimism, the majority of respondents remain pessimistic about the economy as a whole,” they added.
Some 35 percent of the executives surveyed remain pessimistic about the overall economy, roughly the same as the previous quarter. Optimism, meanwhile, dipped slightly to around 28 percent.
The only category increasing was the “neutral” view of executives that climbed past pessimism for the first time since the recession to nearly 40 percent.
The financial executives also don’t expect a rapid economic recovery. A mere 4 percent expect a revival to pre-recession activity this year. Meanwhile, 36 percent don’t expect such a rebound until after 2012 compared to 35 percent who expect the recovery this year. Just 23 percent see a rebound in 2012.