New numbers regarding unemployment rates paint a grim picture, but some corporate directors remain unconcerned. The National Association of Corporate Directors’ Board Confidence Index reports that nearly 50 percent of all directors anticipate strong employment growth in their companies in the third quarter of 2011.
Employers added just 54,000 jobs to their payrolls throughout the month of May, a steep decline in job growth that resulted in an unemployment rate of 9.1 percent.
But while directors’ overall confidence in the economy fell slightly to 63.1 in Q2 2011 from 64.9 in Q1 2011, NACD’s BCI found that 48.1 percent of companies’ employment activities resulted in a net gain. Larger companies were the most optimistic, as 61 percent of companies with a market capitalization between $2-10 billion reported net gains in employment numbers.
“Consistent with previous BCI results, directors are still optimistic about their companies’ future,” said Theodore L. Dysart, vice chairman from Heidrick & Struggles. “The great news is that nearly half of all companies plan to expand their payrolls next quarter.”
Despite positive expectations for next quarter, confidence in projections for next year took a minor decline, dropping from 69 last quarter to 67 for Q2. The quarterly BCI report is designed to measure corporate directors’ level of confidence in the overall economy as well as to provide a board perspective on the state of specific industry sectors.