Rising demand! Expanding profit margins! Increased expectations for economic growth! Brighter employment outlook! Increased capital spending! Is this really happening? And the survey says….Yes! Well, at least according to the National Association for Business Economics January 2011 Industry Survey which is packed with such high hopes.
- Industry demand in all four major industry sectors increased for a sixth consecutive quarter during the final 3 months of 2010.
- Profit margins expanded for a sixth quarter in a row.
- Employment market improvement: The hiring outlook for the next 6 months finds 42% of respondents indicating their firms will increase employment.
- Expectations for future capital spending are higher with 62% of respondents reporting higher planned expenditures
Interestingly, these findings are not connected to new tax policies. Firms “anticipate no increase or decrease in investment spending or employment in response to new tax policies” which suggests business decisions are being driven by the fundamentals of an improving economy. Boo-yah!
”The number of firms expressing positive hiring planned is at a level not seen in over a decade – a sign of improving labor-market dynamics”
The stock market has recovered nicely from 2009 lows and corporate profits are on the rise. Employment is the last key ingredient to what will be the end of a slooooow recovery. I’m not looking for 5% unemployment by years end, but some slow, steady decline to 8% this year would be a real victory and a sign of better years ahead.