Firms Plan to Increase Hiring, Study Says

U.S. firms will pick up their pace of hiring in the third quarter to the best level in 15 months as they build on an economic recovery that began in the second quarter, a survey released today suggests.

Staffing projections are gathering strength across the country, according to the quarterly employment outlook survey conducted by Manpower Inc., a privately held employment agency.

The report said 27% of the nearly 16,000 companies interviewed by phone plan to add employees in the third quarter of this year, compared with 21% in the second quarter.

Eight percent expect to reduce staffing, compared with 10%, while 59% said they would sit tight and not make any changes. Six percent were uncertain.

When the seasonal effect is removed from the data, the improvements reflect a 14% net increase in employment prospects, a substantial rise over the seasonally adjusted results of the last two quarters, the survey said.

“Overall, the hiring strength is at its most positive level in five quarters,” said Manpower Chairman and Chief Executive Jeffrey Joerres. “Hiring intentions are consistent with those we have seen in past recovery periods,” he added.

The U.S. economy raced ahead in the first quarter at the fastest pace in more than two years as consumers spent solidly and a yearlong trend of sharp cutbacks in business inventories showed signs of tapering off, the government said last month.

U.S. gross domestic product, measuring the amount of goods and services produced within the United States, soared at a 5.8% annual rate in the first three months of this year.

However, early this month the Labor Department said the U.S. unemployment rate shot up to its highest level in more than 71/2 years in April. Analysts said the unemployment data showed the economy was still having difficulty getting traction for sustained growth after last year’s downturn.

Joerres said work force projections are gathering strength in all regions of the country for the third quarter, when compared with the same period last year.

The survey said eight of 10 sectors are forecast to have improved hiring opportunities, with education and mining being the exceptions and likely to show a continued downward trend.

The construction sector is expected to do the most hiring. Among firms, 38% plan to hire workers, while 6% are set to reduce their payrolls. When seasonal variations are removed, the construction sector is expected to see a 17% net gain in jobs, the survey said.