Top CEOs are optimistic about economy, have stable hiring plans

U.S. businesses faced major economic uncertainty at the start of the year, as the fiscal debate dragged into the first days of 2013 and the sequestration threw many into a panic. However, one should learn to never question the resolve of American businesses, as a recent survey found top-level executives were more optimistic about the economy's future compared to last year. While the same survey found CEOs had tempered, but sturdy hiring plans, a recent index indicated the employment situation was better than some let on, making recruiting agencies a valuable asset for firms looking to boost employment.

Expected increase in sales fuels optimism
First-quarter business sentiment among U.S. CEOs improved significantly from fourth quarter 2012. The Business Roundtable (BRT) CEO Economic Outlook Survey Index grew to 81.0 during the first three months of 2013, a quarter-over-quarter rise from the 65.6 registered in late 2012. The current reading puts the index near its long-term average of 79.2.

A major factor behind the rise was the greater number of CEOs who foresaw sales hikes. Seventy-two percent of CEO respondents expect company sales to increase in the next six months, up from the 58 percent who said the same in fourth quarter 2012. Thirty-eight percent expect the economy to improve during the same timeframe, while 30 percent agreed last quarter.

Hiring plans steady
The Conference Board recently announced its Employment Trends Index increased to 111.14 in February from January's reading of 109.93, which translated into a 3.2 percent year-over-year increase.

Like the BRT study, CEO respondents to the The Confernce Board survey expressed consistent, if not encouraging, hiring intentions. While the percentage of those expecting employment to increase during the next six months did not change from quarter to quarter, fewer expected layoffs in early 2013. Twenty-nine percent predicted decreased employment in fourth quarter 2012, while only 25 percent said the same in first quarter 2013.

Both indexes cautioned recent factors, like political gridlock, could impact hiring negatively.

"CEOs foresee somewhat better economic performance for the next six months, with improved expectations for sales and capital expenditures," said Jim McNerney, chairman of both the BRT and The Boeing Company. "The relatively smaller improvement in the outlook for hiring, however, may reflect ongoing uncertainty and a wait-and-see attitude about the business climate in the United States, as agreement on the nation's debt and budgetary issues remains elusive."