U.S. chief executives' view of the economy brightened in the first quarter, with more than half now ready to add jobs -- a critical step if the economy's recovery is to gain steam.
The Business Roundtable's quarterly CEO Economic Outlook survey found that 52 percent of CEOs plan to add staff in the United States over the next six months -- the highest reading since the group began doing the survey in late 2002.
The CEO outlook index also hit a record high.
Our CEOs see momentum in the U.S. economy. We collectively are expecting increased sales and as a result expect to do more investing and hiring over the next six months, said Ivan Seidenberg, CEO of Verizon Communications Inc
But he cautioned that many of the survey responses came in before the March 11 earthquake that set off Japan's current nuclear crisis, and noted that the after-effects of that event, as well as oil's rise back over the psychologically important $100 per barrel mark, would weigh on corporate confidence.
The question of how deep this goes throughout the economy is a different question. And there we still need a lot more information, Seidenberg told reporters on a conference call.
CEOs' changed views on hiring would be very good news for an economy that has struggled with high unemployment even since its last 18-month recession officially ended in June 2009 and for the administration of U.S. President Barack Obama, who has faced criticism for his handling of the economy.
It is also in line with other recent data, including a Wednesday report from payrolls processor ADP, which showed that the U.S. private sector added 201,000 jobs in March.
That news helped boost U.S. stocks in early trading -- continuing a rally that has seen the broad Standard & Poor's 500 index <.SPX> rise 12 percent since the start of the year.
CEOS FORECAST SALES GROWTH
A key factor driving CEOs' increased confidence is sales growth, which 92 percent said they expected over the next six months. Sixty-two percent of the 142 CEOs who responded to the survey said they planned to boost capital spending over the that period.
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CEOs now look for U.S. real gross domestic product to rise 2.9 percent in 2011, up from their prior forecast of 2.5 percent growth.
The Roundtable's quarterly CEO Economic Outlook index -- which measures all these variables -- surged to 113, the highest in the nearly 10 years the group has been doing the poll.
Investors will get a more detailed read of corporate America's economic outlook over the month, as big companies from Alcoa Inc
The Roundtable, whose member companies collectively generate close to $6 trillion in annual revenue, conducted the survey between February 28 and March 18.
(Reporting by Scott Malone, editing by Dave Zimmerman)