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CEOs cautious about increase in sales, hiring

NEW YORK — Top corporate executives aren't quite as optimistic about sales growth now as they were in June, suggesting that some are putting plans to hire more workers on hold.

Sixty-six percent of the chief executives that Business Roundtable — an association of CEOs of big U.S. companies — surveyed in September expected sales to grow over the next six months. That is down from 79 percent who said they expected sales growth in June.

"We're still seeing some caution from consumers and companies," said Ivan Seidenberg, the group's chairman and the CEO of Verizon Communications Inc.

Without strong demand, companies are hesitant to hire, he said. Evidence this summer that growth is slowing in the United States has put a damper on the recovery in the jobs market, and some companies are still laying off employees.

Companies may remain wary of boosting payrolls into next year, according to the September survey. Only 31 percent of CEOs said they expected to boost their payrolls in the next six months. That is down from 39 percent who said in a June survey that they expected a bigger work force. The June percentage had been the highest level since mid 2007, before the recession began.

A few big retailers have said recently that they plan a rush of hiring for the holiday season. Toys "R" Us said Tuesday that it will bring on about 45,000 seasonal workers, doubling its U.S. work force. That's 10,000 more temporary workers than the Wayne, N.J., chain has hired in past holiday shopping periods.

But some companies that had big rounds of layoffs during the worst of the recession are still trimming their work forces to bring down costs. Drugmaker Bristol-Myers Squibb said last week that it would cut 3 percent of its employees, or about 840 jobs, in the next six months. The cuts follow the huge rounds of layoffs Bristol-Myers Squibb made in 2007 and 2008, when it let go 41,000 employees worldwide.

While hiring plans remain muted, some companies plan to invest more in technology. The September survey said 49 percent of the CEOs think capital spending will increase. That's up slightly from the 43 percent who expected higher capital spending in June.

Renewed spending from businesses is giving a boost to technology companies such as database software maker Oracle Corp. With big cash reserves, large corporations are once again updating their computer systems and other tech equipment after a spending freeze during the recession.

CEOs cautious about increase in sales, hiring 09/28/10 [Last modified: Tuesday, September 28, 2010 9:48pm]
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