July 16 - U.S. companies scale back hiring plans as European crisis hurts revenues. Sasha Salama reports.
U.S. companies see more gray clouds looming on the economic horizon especially on the hiring front. A new report from the National Association for Business Economics finds more than half those surveyed expect real GDP to grow just two percent or less in the coming year. That's nearly double the percentage of companies from just a few months ago that expected such slow growth. Dr. Nayantara Hensel heads the NABE survey. SOUNDBITE: DR. NAYANTARA HENSEL, CHAIR, NABE INDUSTRY SURVEY, (ENGLISH) SAYING: "The goods producing sector, which encompasses manufacturing in the U.S., agriculture, mining, this was a group that was particularly impacted by the European crisis. And I think that they are one of the areas that's the most likely to have unchanged employment in the coming months as they're trying to determine how things are going to work out in Europe." The survey finds fewer U.S. companies are planning to hire workers because of uncertainty in Europe, 23% down sharply from three months ago. Domestic concerns are only fueling companies' reluctance to hire. SOUNDBITE: DR. NAYANTARA HENSEL, CHAIR, NABE INDUSTRY SURVEY, SAYING (English): "I think there are also a lot of concerns about the fiscal cliff. And if, in fact, it does take place, the Bush era tax cuts do expire in December, government spending cuts do happen in early January, how this is going to impact sales. And since firms just don't know, they're much less likely to want to hire than they have been in the past." Whether or not Congress approves a long-term plan to cut the deficit, one thing is clear. U.S. bottom lines are getting pinched by Europe. Nearly half the companies surveyed reported that sales have dropped because of Europe's crisis. That's up from just a-quarter of companies polled three months ago. And if sales continue to suffer, economists say hiring will continue to slow. Sasha Salama, Reuters.