Despite the stock market correction and the ongoing problems in Europe the U.S. economic recovery is still moving forward, according to ChangeWave’s latest corporate quarterly survey — led by an uptick in U.S. corporate sales growth and an improving labor market.
The June survey of 2,771 corporate respondents also shows a further easing of the U.S. credit crunch, particularly among large businesses, along with a slight uptick in capital spending growth and the sales pipeline.
Firm Upward Movement for U.S. Economy
Better than one-in-four respondents (27%) now say that their company sales will come in Above Plan for second quarter 2010 – five points more than in the previous survey. Another 28% say their company sales will come in Below Plan – a four point improvement.
As the following chart shows, the current second quarter sales projections represent the fifth consecutive quarterly improvement dating back to the lows of 15 months ago – the longest period of sustained sales momentum in a ChangeWave corporate survey in nine years.
Job Market: For the second consecutive survey we’re seeing real improvements in the labor market. A total of 24% report there are More new hires in their company at this point in the second quarter vs. last quarter – up 5-pts since the previous survey. Only 11% say there are Less new hires – 2-pts better than previously.
The biggest improvements are occurring in large sized companies (over 1,000 employees). In contrast, hiring among the smallest sized companies is up just 1-pt compared to the previous quarter.
Impact of the Credit Crunch: For more than two years we have been measuring the impact of the credit crisis on U.S. businesses – which is generally considered to be a key cause of the 2008 recession. In a positive development, for the second consecutive survey we’re seeing some improvement on this key issue.
While one-in-five respondents (20%) continue to say that it is harder for their company to borrow money than it was 90 days ago – that’s a 3-pt improvement from the previous survey. Just 3% say it’s easier to borrow money, unchanged from previously.
Sales Pipelines: Looking forward, sales pipeline projections for the third quarter also show an uptick – with 27% of respondents now saying their company sales will come in Above Plan, 2-pts better than the previous survey. Only 18% report they’ll come in Below Plan – a 1-pt improvement.
In terms of individual sectors, the Semiconductor sector continues to show momentum this quarter, along with two other top performers – Transportation and Computer Hardware & Networking.