A new survey from the National Association for Business Economics shows signs of a strengthening economic recovery -- with a number of firms indicating that they planned to hire new positions at a level not seen in more than a decade.
Approximately 34 percent of the firms in the quarterly NABE Industry Survey are reporting larger workforces compared to just 13 percent a year ago, while the share of firms cutting jobs has decreased. And about 42 percent of the survey respondents indicated that their companies would increase employment, up 13 percent from a year ago. The NABE says the employment outlook has hit a 12-year high.
"Firms typically don't want to hire new workers if they think it's only temporary," said Shawn DuBravac, chairman of the committee that conducted the survey and chief economist at the Consumer Electronics Association. "So the fact that they're starting to -- that we've got this broad base of companies saying we're going to hire in the next six months -- is probably consistent with a feeling among these companies that the recovery is both viable and sustainable."
Results from the survey show that firms are anticipating economic growth, seeing their profit margins expand, increasing their capital expenditures, and expressing greater optimism with improved hiring plans.
Though many firms have a positive outlook for 2011, the survey results should not be taken to mean the overall unemployment rate will dramatically improve, said DuBravac.
"The results are not going to match with an unemployment number drop, but it does suggest a positive tone for the months to come," he said.
Participants in the NABE survey work for private-sector firms and industry trade associations across different areas of the economy. Eighty-four panelists responded to the survey. Respondents are grouped into four sectors: goods-producing; transportation, utilities, information, communications; finance, insurance, real estate; and services. All four sectors expressed optimism in their employment outlook for the coming year.
Other highlights of the survey:
Industry demand increased for a sixth consecutive quarter during the final three months of 2010 with 55 percent of survey panelists reporting rising demand versus 12 percent reporting falling demand.
Profit margins expanded for a sixth quarter in a row, with 38 percent of respondents reporting that margins rose at their firms versus 18 percent who reported a decline in profitability.
The cost of materials continues to rise, but not to the highs seen in 2008. It's not at a level of concern right now, but it's something to continue to watch for, said DuBravac.