Few CEOs plan to hire in next 6 months

More of America’s largest companies will shrink their staffs than will hire in the next six months, according to the latest survey of their CEOs.

A quarterly survey from the Business Roundtable released Tuesday found that 19 percent of the CEO expect to expand their work forces, while 31 percent predict a decrease in the next six months. That’s slightly better than the 13 percent who expected increased hiring three months earlier. At that time, 40 percent forecast cuts.

The CEOs also expect the overall U.S. economy to grow by 1.9 percent in 2010. That would mark a slowdown from the 2.8 percent pace in the third quarter of 2009. Last quarter’s growth followed four straight quarterly declines and was the strongest signal that a recovery from the recession had started.

In more positive news, the group’s economic outlook index ? a combination of expectations for spending, sales and hiring ? rose to 71.5, from 44.9 in the third quarter. Numbers above 50 represent economic growth. It was the first time the index rose above 50 since the third quarter of 2008. That survey did not reflect the sharp contraction that hit the economy in the six months that followed.

The number of CEOs expecting to increase capital spending nearly doubled, to 40 from 21 percent. The number forecasting an increase in sales grew to 68 from 51 percent.

A new question on the survey asked CEOs to identify their greatest cost pressures. The largest group ? about one-third ? cited health care.

The Roundtable has emerged as an aggressive voice in the debate over the Obama administration’s overhaul of the health care system. The group has applauded some measures it says would keep costs down. But it has criticized provisions like a government-run plan for those who can’t get other insurance.

“The economy is in the throes of a long transition back to health; recovery will be long, extending beyond 2010,” Ivan Seidenberg, CEO of Verizon Communications and chairman of the Roundtable, said in a statement. “The outlook of our CEOs reflects that reality: we see noticeable gains in sales and capital spending but employment growth continues to lag.”

Copyright 2009 The Associated Press.