Nearly three-quarters of CEOs in the Business Roundtable expect to cut workers in the next six months as sales sag, a survey showed Tuesday, suggesting further deterioration in the job market is likely at least through the end of the year.
Seventy-one percent of CEOs said they expected to cut workers during the next six months, up from 60% when the quarterly survey was last conducted in November and the highest percentage since the survey began at the end of 2002, the Business Roundtable said. Twenty-one percent expected to keep payrolls unchanged; 7% said they planned to add workers.
The survey of 100 CEOs of the nation's largest companies was conducted March 16-March 27.
The grim outlook for the job market comes as CEOs anticipate lower sales and business investment over the next six months. Sixty-seven percent said they expected their sales to drop, up from 45% in the last survey, while 66% said their company would likely cut spending on equipment and other capital goods, up from 52%.
The CEOs on average expected U.S. gross domestic product, the widest measure of the nation's economic output, to fall 1.9% in 2009 after rising 1.1% in 2008. If realized, it would be the first annual drop in GDP since 1991 and the biggest since 1982, when the economy was in a deep recession. In November, the CEOs expected 2009 GDP to be flat.
Business Roundtable Chairman Harold McGraw, CEO of The McGraw-Hill Cos., said that while the numbers represented the "significant pressure on American businesses," he still expects a turnaround in the economy toward the end of the year.
Strong government actions in the USA and abroad to unclog the lending markets and prop up the global economy are already having some effect, such as reducing mortgage rates to record lows and boosting stock prices, he noted.
"These are going to be our darkest hours," McGraw told reporters. "We are going to see some improvement" going forward.
The report comes a few days after the government announced employers cut 663,000 jobs in March and reduced workers' hours to record lows. The unemployment rate was 8.5% last month, up from 8.1% in February and the highest in more than a quarter-century.
The USA has been in a recession since December 2007.