NABE Finds ‘Stepped-Up’ Growth in Jobs, Payroll
WASHINGTON -- The most recent quarterly survey by the National Association for Business Economics finds sales continue to advance but at the slowest rate of the year.
The chief economists of 65 companies or trade associations participated in the NABE survey between June 18 and July 2 that inquired how their companies have performed and their outlook for the near term.
Results “indicate that sales continued to advance in the second quarter, although at a slower pace than any time during the past year,” said Timothy Gill, chairman of the NABE Industry Survey Committee and vice president of business information and statistics at The Aluminum Association, in a prepared statement.
More than a third of the respondents reported that sales at their companies rose during the second quarter, more than double those reporting a decline. Regardless, “the survey results point to a stepped-up rate of employment growth,” Gill said, and payrolls rose at a majority of the firms. So much so that firms reporting payrolls rose at the firms “outpaced the share reporting declining payrolls by the widest margin since the fourth quarter of 2011. Meanwhile, capital spending momentum slipped slightly while profit margins contracted on balance for the first time in four years amid evidence of stable materials cost inflation but slower growth in price charged.”
Despite the “mixed signals,” Gill said the consensus is “economic growth improved for a third straight quarter … with real GDP growth exceeding 2% the next 12 months.”
Nevertheless, his membership’s optimism remains guarded.
Highlights of the Business Economics second-quarter survey:
- Sales slowed. Just more than a third, 35%, reported rising sales at their firms compared to more than half, 55%, in the April survey.
- Profit margins eroded. Participants reporting rising margins dropped to 21% from 29% in April.
- Payroll gains picked up. Nearly 30% reported employment gains at their firms while those reporting declines in employment remained unchanged.
- Capital spending growth remained nearly unchanged.
- Expectations for capital spending remain upbeat.
- “A large majority of panelists noted no adverse impact from this year’s tax increases and federal government spending sequester on business activity in the second quarter, but a sizeable – and growing – minority did report such an effect. Seventy-four percent of panelists indicated no negative impact on their firms’ sales from tax increases or sequestration in the last three months, down from the 79% in the April survey. Twenty-six percent reported a negative impact, up from 16% in April.”
- The panelists’ expectations for economic growth in the United States continue to improve. The majority view – held by 70% of the economists – is that the economy will grow by only 2% to 3% over the next 12 months.
- Payrolls might be increasing but these increases appear to be moderating the respondents’ firms.
- Expectations both for prices charged and how must firms pay for their materials during the third quarter “suggest only modest inflationary pressure. Just under a quarter, 23%, expect their firms to raise prices, down from 27% in April and 40% in January.
Published by The Business Journal, Youngstown, Ohio.
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