More Small Businesses Expect to Hire in 2012: Survey

Clerkenwell | Getty Images

Smaller companies were feeling more confident about the prospects for the U.S. economy in the fourth quarter, a survey of chief executive officers showed, sentiment that could bode well in 2012 for reducing America's still high unemployment rate.

Some 41 percent of CEOs surveyed said the economy had improved over the last 12 months, more than double the response in the third quarter, Vistage International said on Wednesday. Twelve percent said the economy had worsened.

The survey of 1,641 CEOs marked more optimism in the economy in every component of Vistage's "confidence index," which was 98.8 in the fourth quarter, up from readings of 83.5 and 92.9 in the previous two quarters respectively.

More companies planned to hire employees this year, and expected revenue and profit gains, compared to the third quarter, according to the survey conducted over 10 days in December.

The results coincide with growing signs of a stronger economic recovery at the end of 2011, including an improving labor market, continued household spending, and expectations of a strong rise in fourth quarter U.S. growth.

In part, the more optimistic results reflect a relative lack of troubling news in the last three months of 2011, compared to the political deadlock, U.S. credit rating cut, and stubbornly high unemployment that dominated headlines in the third quarter, said Vistage CEO Rafael Pastor.

"The very fact that things didn't get worse is for some people a cause for optimism," Pastor said, adding some 75 percent of new U.S. jobs are created by the small- and medium-sized business sector covered by the survey.

Some 55 percent of CEOs said they expected to increase the number of employees this year, up from 46 percent in the previous quarter, while six percent expected job cuts.

A separate report on Wednesday, by Intuit, showed U.S. small businesses created 55,000 jobs in December and increased working hours for employees, further evidence of a stronger labor market.

U.S. unemployment dropped to a still-high 8.6 percent in November, which, along with the moribund housing market and European debt crisis, still threatens to derail a recovery from the worst U.S. recession in decades.

Forty-three percent of CEOs surveyed by Vistage said Europe's crisis affects their business, while 69 percent said they are affected by the failure of Congress to address the U.S. debt and deficit.