A survey by the National Association of Business Economics [NABE] showed Monday that the nation’s economy remained weak in the first quarter, but it also hinted that the decline is slowing.
From NABE: “NABE’s April 2009 Industry Survey provides fresh evidence that the U.S. economy’s recession is abating,” said Sara Johnson, IHS Global Insight. “Key indicators—industry demand, employment, capital spending, and profitability—are still declining, but the breadth of decline is narrowing. Declines still outnumber gains, but fewer firms are reporting declines and more are reporting gains. This suggests that the economy is at an inflection point but has not yet reached a turning point….”
While the pace of the recession may be moderating, businesses continued to grow more pessimistic about the macroeconomic outlook. 93% of respondents expect the nation’s GDP to decline in 2009, and over half expect a drop of 2% or more.
Employment also remained depressed in Q1. The survey found that 39% of firms cut payrolls, while only 14% added workers. But the outlook for jobs in the near future is slightly better: 33% of companies plan to reduce payrolls over the next six months, while 16% plan to increase employment.
In the April survey, a higher percentage of firms reported increasing capital spending over the last three months than in January. Nevertheless, cutbacks in capital spending still outnumbered increases. In January, no firm planned to increase capital spending by more than 10% over the ensuing 12 months. This quarter, 6% of firms expected to raise capital spending by more than 10% and 21% of firms planned an increase of some kind over the next year.
NABE’s Industry reports is based on data from 109 businesses and industry groups from the first quarter of 2009.
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