Executives at midsize companies gained confidence in the second quarter, with 43 percent expecting to add employees in the next 12 months, according to a survey (PDF) released today by the National Center for the Middle Market. That’s up from 38 percent who predicted hiring in the NCMM’s first-quarter survey.
To conduct the quarterly survey, the NCMM, which is funded by GE Capital (GE) and housed at Ohio State University’s Fisher College of Business, polls 1,000 executives at public and private companies across the country. The survey is an attempt to reflect opinion at the 197,000 U.S. businesses it defines as midsize: those with annual revenue from $10 million to $1 billion.
Three other findings:
Executives’ confidence in local economies is greater than their national or global outlook. That’s not a new finding. Last month, NCMM academic director Anil Makhija told me that respondents are often able to exert more control close to home, making them optimistic about their local economies. Still, the gap widened in the second quarter: 35 percent of respondents claimed confidence in their local economies, up from 28 percent in the first quarter. Confidence in the national economy increased to 19 percent from 14 percent; confidence in the global economy remained at 6 percent.
While more respondents’ predicted increased hiring in the year ahead, that optimism didn’t carry over to the stock market. Executives predicted that the S&P 500 would increase 1.2 percent in the year ahead. In the first quarter, respondents’ thought the S&P would increase 2.8 percent in the year to come.
The biggest perceived obstacle to growth is still health care, with 58 percent of respondents saying that costs were “highly challenging,” making health care the most common worry. The second most common challenge: the effects of unpredictable of government actions, according to 40 percent of respondents.
The survey was conducted before the White House announced that it would delay for a year implementation of the employer mandate in the Affordable Care Act that requires companies with 50 or more workers to offer health insurance. The Obama Administration’s decision “pushes costs into the future, but is at least a momentary release,” Makhija says. “I don’t have any direct data, but I don’t see the delay as resolving the issue. It just adds more uncertainty about when and how it will be imposed.”