U.S. business leaders’ confidence in the economy rose nearly 12 percent after the close of the second quarter, according to Grant Thornton’s Business Optimism Index.
The optimism index rose to 60.9, up from 54.5 three months earlier, with 58 percent of business respondents reporting that they expected to come out of the recession by early 2010.
The BOI is a quarterly survey of executives’ perceptions of the U.S. economy, their own business growth and hiring expectations. More than 360 senior executives from an array of industries, nearly half of them representing businesses with revenue topping $1 billion, responded to the survey. Another 20 percent of respondents had revenue between $1 million and $500 million.
Mark Wuller, managing partner of Chicago-based Grant Thornton’s St. Louis office, said the index suggested a growing consensus among business leaders that the worst of the recession is over. “We’re seeing some clients point to the month of June, saying it seemed to be a bottom for them and that orders or business picked up in July and some more in August,” he said.
Michael Jenny, vice president in the industrials group at the Chicago office of Houlihan, Lokey, Howard & Zukin Inc., an investment bank and mergers and acquisition company, said the mood among his firm’s industrial clients matched that of business executives surveyed by Grant Thornton.
But businesses are wary of turning an initial recovery upside down by being too aggressive, Jenny said. “If (manufacturers) start restocking and demand doesn’t come back, then we might have another downturn a few months out, which is the worry now.”
While more business leaders feel their companies are gaining a solid footing, most are still reluctant to begin hiring. Only 26 percent of business executives surveyed said they planned to increase staff, while 18 percent expected more layoffs to come.