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CFO's See Cloudy Economic Forecast
Written by Jeff Hamlin   
Monday, 13 June 2011 12:40

(DURHAM) -- A Duke University survey of chief financial officers in the U.S. finds confidence in the economy has fallen. CFO optimism about the economy fell to 57 on a 100-point scale, down from a 61 rating last quarter. Duke Professor John Graham says CFOs predict hiring will be minimal over the next year, with employment growing by seven tenths of a percent.

 

"The labor force rose rose every year, so you need one percent growth just to keep up with labor force growth. In other words the unemployment rate will probably stay fixed right around nine percent for the next year, according to the CFO forecast.

Despite the forecasts for moderate economic growth and a slow job market for the next year, Graham says there is some good news on the employment front.

"Twenty-one percent of companies tell us they are in hiring mode.  Another 16 percent said they would like to be hiring but they are resource constrained.  And another nine percent said they'd like to be hiring, but they're having a hard time finding the right skill set among job applicants."

Pessimism among Chief Financial Officers about the economy during the next year focuses not just on those who lost their jobs, or those who are having a hard time finding work, but also on those who managed to retain their position but had their benefits slashed during the recent recession. Professor John Graham says that should change in the year ahead.

"Nearly half of companies said they're going to restore the training and development at their companies that they'd cut during the recession ... And nearly half said they're going to increase their pension contributions, or 401-K contributions made by the company, back to pre-recession levels."

Despite the optimistic projections on job growth and benefit reinstatement, U.S. companies expect domestic employment to increase by 0.7 percent over the next year, which should keep the unemployment rate at nine percent.

Last Updated on Monday, 13 June 2011 12:46
 
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