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U.S. companies are expected to hire and invest more in the next six months, a survey report from the National Association for Business Economics or NABE showed on Monday.
The survey showed continued improving conditions across the industrial front, albeit at a moderate pace.
Industrial demand grew for the second consecutive quarter, with the goodsproducing; finance, insurance & real estate (FIRE) and services sectors all reporting a rise in demand. Profit margins also expanded for the second straight quarter, albeit at a slow pace.
The share of respondents whose firms increased their capital spending over the prior quarter dipped in January's survey, after rising sharply from July to October. Expectations for future spending improved for the fifth straight quarter, with positive answers outstripping negative answers three to one.
A reduction in inventories was indicated by 59% of the respondents, with firms attributing cost cutting measures and weaker sales. On the other hand, 19% of firms reported replenishing inventories in anticipation of higher sales.
Unemployment levels appeared to be easing, with the percentage of firms cutting payrolls declining to 28% from 31% in the last survey. The percentage of firms hiring edged up to 13%, while the share of respondents expecting their firms to add employees over the coming six months rose to 29% from 24%.
Output prices were expected to rise, with the share of respondents expecting price increases in the next three months exceeding those expecting cuts by 29 percentage points.
Further, firms were confident of economic growth in the next year, with 61% of respondents expecting the real GDP to expand by more than 2% in 2010 - up from 45% of respondents in October.
The NABE Industry Survey was conducted between December 18 and January 7 and presents the responses of 75 NABE members regarding business conditions in their firm or industry.
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