By Thomas Ahearn, Employment Screening Resources (ESR) News Editor
A new survey from the National Association for Business Economics (NABE) revealed that economists are hopeful about economic growth and increased hiring while the number of firms planning to hire workers is at a level not seen in over a decade.
The NABE Industry Survey January 2011 – which includes the views of 84 economists for private companies and trade groups that are NABE members – also found that 42 percent of economists saw hiring by their firms increasing over the next six months compared with only 7 percent who expected to lay off workers, resulting in Net Rising Index, or NRI, of 35, the highest NRI in the 12 years that the question has been asked. The current NRI – the percentage of panelists reporting better outlooks minus the percentage whose outlook is bleaker – is the highest level it has been since 1998.
The NABE survey also found that:
- Employment continues to improve, with 34 percent of firms reporting larger workforces compared to only 13 percent a year ago.
- The number of firms cutting jobs shrank from an average of 13 percent over the past three quarters to 6 percent currently.
- The hiring outlook for the next six months looks more robust with 42 percent of respondents indicated their firms will be increasing employment, up from 39 percent last quarter and 29 percent in January 2010.
As for economic growth, the NABE survey revealed that 62 percent of the economists surveyed expected Gross Domestic Product (GDP) growth of 2 to 3 percent in 2011 while one in five (20 percent) expected 3 to 4 percent economic growth. Overall, 82 percent expected the economy to grow by 2 to 4 percent in 2011, up from 54 percent in October.
Also, profit margins expanded for a sixth quarter in a row as 38 percent of economists surveyed reported that profits rose at their firm while 18 percent reported declining profitability. The resulting NRI of 20 is the largest spread since 2005. The survey concluded business decisions are “being driven by the fundamentals of an improving economy.”
The NABE Industry Survey was conducted between December 17, 2010 and January 5, 2011. The entire survey, with answers and historical data, is for NABE members only.
With more employment comes the need for more employment screening. Employment Screening Resources (ESR) is a leading provider of background checks for employers and is accredited by The National Association of Professional Background Screeners (NAPBS®). For more information, visit http://www.ESRcheck.com.