U.S. companies are less optimistic
than they were three months ago about economic growth this year,
the top issue for many voters in Tuesday’s presidential election,
according to a National Association for Business Economics survey.
Sixteen percent of 115 respondents said they’re “somewhat
more optimistic” about growth in the second half, down from
41 percent in July. More than half said their outlook had not
changed, the Washington-based organization said in a statement.
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The U.S. economy grew at a 3.7 percent annual rate from July
through September, slower than economists expected, the Commerce
Department said Friday. A 61 percent jump in oil prices this year
is cutting into consumers’ wallets and may trim business spending.
“Growth in economic activity is slowing slightly in the
current quarter, but remains solid,” said Kurt Karl, chief
economist at Swiss Re and one of the conductors of this survey.
The National Association of Purchasing Management-Chicago
said Friday its regional index rose to 68.5 this month, the highest
in 16 years, from 61.9 in September. October is the 18th month of
uninterrupted expansion in the region, according to the index.
The economy was named as the top issue in this year’s
election by 24 percent of likely voters polled by ABC News and the
Washington Post Oct. 22 to 25. Most polls show President George W.
Bush and his Democratic rival, Massachusetts Senator John F.
Kerry, deadlocked for voter support ahead of the Nov. 2 election.
Almost three quarters of the NABE survey respondents, or
71 percent, forecast the U.S. economy growing in the 2 percent
to 4 percent range in the second half of this year.
Thirty-nine percent of respondents said they plan to increase
hiring in the next six months, down from 41 percent in July, and
15 percent said they expect headcount to decrease as a result of
attrition, up from 8 percent three months ago, the survey found.
Sixty-one percent of companies surveyed by NABE had no change
in employment in the third quarter, compared with 55 percent in July. Twenty-seven percent increased hiring in the three months
through September, down from 33 percent the preceding quarter.
The United States added 103,000 jobs a month since June, about half
the 204,000 average in the first half of 2004, Ninety-six thousand
jobs were added in September, less than the 150,000 the Federal
Reserve says are needed each month to match population growth.
Hiring “appeared to increase modestly” in September and
early October, the Fed said Oct. 27 in its “beige book” report
on regional economic conditions. Almost half of the 12 Fed
districts reported increases in demand for temporary workers,
and many manufacturers reported increases in permanent hiring.
Thirty-three percent of companies in the NABE survey said
profit margins widened in the third quarter, down from 37 percent
three months earlier. Twenty-one percent said profits declined,
up from 12 percent in July.
More than two-thirds of companies in the survey, or 70
percent, said materials costs rose in the third quarter, up from
62 percent in July. Fifty-four percent of the respondents expect
costs to rise less than 5 percent over the next three months.
Bloomberg News
