US business confidence seen at 20-year high

[The Finman]

<h2><font color=#003399>US business confidence seen at 20-year high</font></h2>
Confidence among US business leaders is stronger than it has been for 20 years, according to a long-running measure of boardroom attitudes, as rising profits finally encourage companies to start hiring.

The quarterly survey by the Conference Board confirms last week's official employment data suggesting concerns about a jobless recovery may be waning.

In recent quarters, companies have been wary of hiring staff, preferring to make greater use of existing capacity, but continued growth and record profitability appears to be convincing managers that productivity improvements alone may not be enough to meet rising demand.

Half the chief executives who responded to the Conference Board's lastest poll said they expected employment in their industry to rise, compared with just 12 per cent who predicted a fall - the most optimistic response on jobs since the research group began its analysis in 1976.

Overall confidence levels about the economy are the highest since 1983, with more than three quarters of CEOs expecting continued growth over the next six months.

Lynn Franco, director of the conference board's consumer research centre, said: "We were expecting a strong confidence reading given the last two quarters of back-to-back growth but the optimism about hiring is particularly interesting and suggests we may have turned the corner.

The bullish results, based on responses from more than 100 members of Conference Board, follow signs of a turnaround in official US employment data, which last week showed the biggest monthly increase for four years.

Expectations that a healthier job market will allow a rise in US interest rates also helped push the dollar to a four-month high against the euro yesterday In contrast, confidence polls reflect only a partial snapshot of the mood among some business leaders, but the Conference Board's results are neverthless in line with other recent surveys showing a rising trend.

Last month, an employment outlook survey by Manpower found US employers expect the seasonally adjusted hiring pace from April to June to be stronger than it has been since the first quarter of 2001.

Earlier in the year, The Business Council, which reflects the mood among large companies, also reported the first signs of a similar pick-up in confidence.


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