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the economy appears to be easing but likely has not yet ended, according
to a survey of economists released on Monday. The National Association
for Business Economics' quarterly industry survey found that demand is
stabilizing, but a small majority of the 102 respondents said their firms
had not yet seen the bottom. The survey "provides new evidence that the
US recession is abating, but few signs of an immediate recovery," said
Sara Johnson, managing director of global macroeconomics for IHS Global
Insight, who helped analyze the report for the NABE. "Industry demand was
still declining in the second quarter of 2009 , but the breadth of decline
had narrowed considerably since late 2008 , raising prospects for
stabilization in the second half" of the year, she said. The net demand
index dropped to -5 from the first quarter's -14. In the fourth quarter
it registered -28. Of the four major sectors, financial services showed
the strongest demand, with an index reading of +15. The transportation,
utilities, information and communications sector had the lowest reading at
-90. The US recession, which dates to December 2007 , is the longest since
the Great Depression and the deepest in decades. Most economists look for
growth to return in the second half of the year, but they caution that the
recovery is likely to be sluggish. The survey found that profitability
remained weak in the second quarter. Companies reporting declining profits
outnumbered companies posting higher profits for the sixth straight
quarter. However, the rate at which profits are shrinking is slowing.
There was wide dissension about whether or not the economy has hit
bottom. Fifty-five percent believe the low point has not yet been hit, with
14 percent projecting their companies will see their lowest sales in 2010
or beyond. Forty-five percent, however, said the worst was already over.
Thirty-six percent of respondents said their companies cut jobs last
quarter, while only 6 percent of the firms added jobs -- an all-time low
for the 30- year-old survey. Respondents expect job losses to slow and
look for employment to finally turn higher later this year.
