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July 2 — Rather than sensing a good deal of labor market slack due to high levels of long-term unemployment and labor force dropouts, almost one-third of all chief executive officers questioned in a recent survey mentioned staffing needs as the most critical issue facing their firms.
Established in 2003, the Index is a quarterly survey of small- to mid-sized business CEOs about the U.S. economy. The Q2 2014 Vistage CEO Confidence Index includes responses from 1,525 U.S. CEOs, surveyed between June 9 and June 18, with a margin of error of 1.6 percentage points, Vistage announced.
The latest survey revealed that the CEO participants “continue to feel confident about today's economy,” according to the news release. The Index was virtually unchanged from the levels recorded in the prior two quarters.
The Index was 101.0 in the second quarter 2014 survey, almost identical with the 101.3 in the first quarter and the 101.5 in the fourth quarter of 2013. This was the best three-quarter performance since 2005.
“The constancy of economic optimism is all the more surprising given the drop in GDP during the 1st quarter, indicating that CEOs discounted last quarter's decline as an aberration due to the harsh winter,” the news release stated.
A second quarter survey by the Business Roundtable found that CEOs of leading U.S. companies had lowered their expectations of U.S. GDP growth for the near term and that companies were reducing their spending in the wake of Congress's failure to renew tax breaks that expired Jan. 1.
Among all firms covered by the second quarter Vistage survey, 57 percent planned to expand payrolls, just below last quarter's 58 percent, which was the highest level since the start of 2007.
“These robust hiring plans were confronted by significant challenges to find and hire qualified staff, more consistent with a tight than a slack labor market,” Vistage stated.
Among all CEOs, 30 percent mentioned hiring new staff as the top business issue that they face, “well above the [16 percent] who mention the deleterious impact of economic uncertainty,” according to the press release.
CEOs' views of labor market conditions make it more likely that wages will begin to rise in the year ahead, Vistage stated.
Vistage's survey is in line with the findings of a similar survey conducted during the first quarter of 2014 by PricewaterhouseCoopers LLP.
That survey found that private company CEOs were looking to hire, but were unable to find qualified workers, which may hamper growth plans. According to the PwC survey, 57 percent of respondents said their companies are looking for new employees.
Headquartered in San Diego, Vistage assembles and facilitates private advisory boards for CEOs, senior executives and business owners.
The Vistage news release and latest Index is available at http://www.vistage.com/press-center/press-release/q2-2014-vistage-ceo-confidence-index-results-released-today/.
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