Job losses were expected to continue over the next six months, but at a slightly slower pace. Thirty-three per cent of firms plan to reduce employment, while only 16 per cent planned to add workers, with half expecting no change in payrolls. -- PHOTO: AFP
WASHINGTON - US businesses see signs that the prolonged recession is easing a bit in the world's largest economy but a return to healthy growth remains uncertain, a survey showed Monday.
Despite broad pessimism about the economic outlook, more businesses planned to increase capital spending and saw demand rising, the survey by National Association for Business Economics (NABE) indicated.
Capital spending hits new lows
CAPITAL spending in April moved off an all-time low set last quarter and reversed a year-long deterioration, NABE said.
In the latest survey, 15 per cent of firms reported increasing capital spending over the last three months, compared with 12 per cent in January.
An overwhelming 93 per cent of respondents expected US gross domestic product (GDP) - a broad measure of US goods and services production - to decline in 2009, with more than half expecting a contraction of 2.0 per cent or more, the NABE survey of 109 members conducted between March 23 and April 1 found.
That compared with a January survey that found 78 per cent expecting a decline in GDP.
Only 7.0 per cent in the latest survey expected any growth this year in an economy that has been mired in recession since December 2007. But the new survey showed a better outlook for industry demand, profit margins, employment, capital spending, and credit conditions, NABE said.
The NABE survey 'provides fresh evidence that the US economy's recession is abating,' said Sara Johnson at IHS Global Insight.
While declines in the indicators still outnumbered gains, the survey numbers were tilting toward the positive. 'This suggests that the economy is at an inflection point but has not yet reached a turning point,' Ms Johnson said.
A growing number of respondents saw rising industry demand, although overall demand fell again in the first quarter of 2009.
Conditions in the labor market remained dismal, in line with negative numbers last seen during the middle of the 1990-1991 recession. Unemployment hit a 25-year high of 8.5 per cent in March. Thirty-nine per cent of firms cut payrolls in the first quarter, while only 14 per cent reported increases.
Job losses were expected to continue over the next six months, but at a slightly slower pace. Thirty-three per cent of firms plan to reduce employment, while only 16 per cent planned to add workers, with half expecting no change in payrolls. -- AFP
