(Reuters) - U.S. chief executives’ view of the economy brightened in the first quarter of 2012, with a growing number ready to hire more workers over the next six months, according to a Business Roundtable survey.
Improving demand in the United States offset concerns that Europe’s economy may be headed into recession, helping to give the Roundtable’s CEO Economic Outlook Index its largest lift since the third quarter of 2009, the group said on Wednesday.
On the key metric of employment, 42 percent of CEOs said they planned to add staff in the United States over the next six months. That is a 16 point improvement from the December reading and more than double the 16 percent of CEOs who expect to cut jobs.
“This suggests hiring will continue,” said James McNerney, CEO of Boeing Co (BA.N) and chairman of the Roundtable.
Improving U.S. demand is offsetting a weakening Europe, he said.
“The U.S. is picking up. Europe is the one that is really headed to negative territory,” McNerney told reporters on a conference call. “While Asia and China are slowing down, they are still at a very high growth rate, and we need to hire people for to satisfy their demand.”
Big U.S. manufacturers including General Electric Co (GE.N) and Caterpillar Inc (CAT.N) have been adding workers this year in response to rising demand for their products, ranging from refrigerators to excavators, and a Labor Department report last week showed new jobless claims in the United States at a four-year low.
Of the 128 CEOs surveyed March 1-19, 48 percent said they expected to boost their U.S. capital spending in the next six months, and 81 percent forecast a rise in sales.
The group’s CEO Economic Outlook Index, which measures sales, hiring and capital spending, rose to 96.9 in the first quarter from 77.9 in the 2011 fourth quarter. Any reading above 50 indicates growth.
The CEOs raised their forecast for U.S. real gross domestic product growth for 2012 to 2.3 percent from 2 percent in December.
The findings come at the end of a quarter that saw Wall Street gain confidence that the U.S. recovery from recession was gaining steam, sending the Standard & Poor's 500 index .SPX up nearly 12 percent over the past three months.
Investors will get a more detailed look at Corporate America’s outlook next month, when most of the nation’s large companies, ranging from Alcoa Inc (AA.N) to JPMorgan Chase & Co (JPM.N), report first-quarter results.
Business Roundtable member companies generate $6 trillion in annual revenue and employ more than 14 million people.
Reporting By Scott Malone; editing by John Wallace