People walk by the recruiters at a job fair in the Pittsburgh suburb of Green… (AP Photo/Keith Srakocic )
WASHINGTON — As more businesses report falling sales, fewer are planning to hire over the next six months amid growing concern about sluggish economic growth and the looming "fiscal cliff."
Just 23% of companies plan to hire in the next six months, down from 39% in April, according to the National Assn. for Business Economics, a group that includes economists at companies, trade associations and academia. The quarterly survey, released Monday, polled member companies last month.
About 39% of the respondents reported rising sales, down from 60% in April. In addition, just 29% of respondents said their profit margins were rising, down from 40% in April.
Optimism is falling along with sales.
With business down, evident in Monday's government report that retail sales had dropped for the third straight month, survey respondents downgraded their economic growth forecasts.
Four out of 10 respondents predicted growth in gross domestic product over the next year would be 2% or less, up from 23% of respondents in April. About 11% in the most recent survey said growth would be 1% or less, an increase from just 4% in April who projected such weak growth.
“The survey results suggest worsening economic conditions through increased flatness in sales and profit margins, less upward pressure on employment, weakening optimism concerning real GDP growth and rising concerns about the impact of the European crisis, potential U.S. government spending cuts in January and the expiration of Bush-era tax cuts in December,” said Nayantara Hensel, a professor of industry and business at National Defense University and a board member of the group.
Hensel noted one positive from the survey: The weakening growth has kept inflation in check. Only 9% of respondents reported charging higher prices, down from 21% in April.
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