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Monday May 21, 12:02 am Eastern Time

US hiring plans approach slowest in decade--survey

By Jane Light

CHICAGO, May 21 (Reuters) - U.S. company hiring plans for the third quarter are nearly the slowest in a decade because of the economic downturn and, in the hard-hit manufacturing sector, hiring is the slowest since the 1980s, according to a major survey.

After almost 16,000 company interviews, a quarterly survey by temporary employment firm Manpower Inc. (NYSE:MAN - news) showed 27 percent expect to add to their work force in the next three months, 9 percent plan to cut staff, 59 percent see no change and 5 percent are undecided.

``The projected hiring strength in the present economy has declined for the second consecutive quarter and now seems to be approaching the 1990-1991 levels in our survey history,'' said Jeffrey Joerres, Manpower president and chief executive. ``Not since the early 1980s has hiring in manufacturing firms been more sluggish at this time of year,'' he said.

The results are less optimistic than those from the same period last year when 35 percent said they would recruit additional people and only 5 percent expected employment declines, according to the survey.

However, economic data reported last week showed some positive signs, including a decline in weekly jobless claims and growing optimism among U.S. manufacturers that raised hopes that interest rate cuts by the Federal Reserve may soon turn the economy around.

Nearly half of the regional manufacturers surveyed in May by the Federal Reserve Bank of Philadelphia said they expected business conditions to improve in the next six months. The bank tracks business conditions in the Delaware, eastern Pennsylvania and southern New Jersey region.

In addition, The Conference Board, a private research firm which monitors consumer confidence, said its key economic forecasting gauge rose for the first time in two months in April, although uncertainty about the U.S. economy's strength remained.

``There are some conflicting things which are not unusual when you are getting into the deep fog that is happening in the economy right now,'' Joerres said in an interview. ``All I can do is look at the data and it is clear that there is less of an appetite to hire now -- about half of the appetite to hire now -- than in the fourth quarter of 2000,'' he said.

The construction and wholesale and retail trades have increased demand for workers each quarter this year, but the rate of growth lags well behind similar periods during last year, according to the quarterly survey.

In the construction industry, results three months ago were below seasonal expectations and the trend continues as 37 percent will continue further recruiting and 8 percent will trim down.

Not since 1982 has activity in durable goods manufacturing been weaker at this season than the present forecast of 24 percent planning increases and a high 15 percent indicating intention to cut jobs, the survey said.

Given a sharp second-quarter decline from seasonal expectations, the wholesale and retail trades, industry will begin its year-end hiring on a subdued basis unseen since 1993 as 32 percent will recruit further and 8 percent plan reductions. This sector includes department stores, catalog and mail order houses, distributors, dealers, and restaurants.

In the finance, insurance and real estate sectors, hiring enthusiasm has dissipated slightly for the fifth consecutive quarter. A national low of 20 percent will continue to increase employment, while 8 percent wish to correct an overstaffed condition, the survey said.

Services firms, including hospitals, hotels, car rental agencies, are among the third-quarter leaders, but at a substantially reduced level from the same period of the past three years, it said. Now, 28 percent are still searching for workers and 7 percent foresee staff cuts.

Manpower's survey has been measuring employers' hiring intentions for 25 years and has been an indicator of employment trends. Headquartered in Milwaukee, Wisconsin, Manpower is the world's leading staffing company with more than 3,700 offices in 59 countries.

-- (M@rket.trends), May 21, 2001