US. Survey Shows Outlook on Economy Darkening
WASHINGTON -- Business people's confidence in the economy deteriorated between June and August, the U.S. Chamber of Commerce said.
Its Business Confidence Index, compiled every two months, averages three subindexes on respondent's outlook for the economy, business sales, and employment prospects over the next six months.
The index fell to 58 in August, from 64.2 in June, for its first decline since December. The chamber surveyed 5,515 businessmen.
37% Expect Improvement
The steepest drop in confidence came in the subindex on the economic outlook, which declined to 56.7, from 70.9 in June. Only 37.7% of respondents saw an improving economy over the next six months, while 24.4% expected it to get worse.
In June, 54.4% foresaw an improvement.
The subindex on sales expectations dropped to 63.8 in August, from 66.4 in June. Of those surveyed, 48.7% said they expected sales to rise and 21.2% saw a decline.
Stuck in Recession
The subindex on expected employment growth fell to 53.5 in August, from 55.3 in June. About 24.1% of respondents plan to hire more employees and 17.2% expect to lay off more.
Lawrence Hunter, chief economist of the business group, said the results "reflect the continuing inability of the economy to rise from recession.
"We expect the situation to continue at least through the end of the year," the economist said, "with little improvement next year and the distinct possibility that things will get worse."
A similar survey of business executives' confidence by the Conference Board of New York showed a decline in the third quarter, reversing a gain in the second quarter.
Some Signs of Optimism
The Conference Board index fell eight points in the latest three-month period, to 62. But the reading is above the neutral point of 50, suggesting that there is still a good deal of optimism. The reading in the first quarter of 1992 was also 62.
"Executives are registering less optimism," said Jason Bram, a Conference Board economist. "But it is hardly an indication of gloom and doom."
Of business leaders surveyed, 48% said conditions improved in recent months, down from 80% in the prior survey.
But only 13% said conditions worsened in the latest period. The more pessimistic were generally found in the insurance, wholesale and retail trade, and heavy manufacturing sectors.