Chief financial officers have become more optimistic about U.S. employment growth, expecting the unemployment rate to drop to just above 7% in the next year, with tech hiring set to rise by 5%.
Respondents to the latest quarterly Duke/CFO Magazine Global Outlook survey expect U.S. employment across multiple industries to increase by 2.5% over the next year, up from 2.1% they predicted last quarter. At that rate, national unemployment should decrease to just above 7% by the end of the next 12 months.
The technology industry, which includes software and biotech, plans to increase hiring by 5% over the next year, respondents said.
That optimism doesn't translate into the finance world. Banking, finance and insurance CFOs expect to cut staff over the next year, averaging -0.8% growth for that period, compared to the 2.5% expected across all industries.
"I was hoping it had bottomed out," said John Graham, a professor of finance at Duke's Fuqua School of Business and director of the survey. "I guess it's not a surprise that they're cutting, but I was hoping for better."
The profit margins "just aren't there" for banks, he said. He pointed to Bank of America, which is in the process of laying off 30,000 people around the world. Weak trading volumes, coupled with the eurozone crisis and regulatory uncertainty, are responsible for the banks' needs to reassess headcount.
The survey polled 801 CFOs from global public and private companies across a broad range of industries, including manufacturing, banking, media and transportation, about their expectations for the economy.
In a different survey conducted by KPMG, senior executives in the banking industry said they're focused on streamlining costs. A third of the 100 executives polled said they would lay off, while 43% said they'd focus on reducing costs and increasing operational efficiency. In the past year, nearly half of respondents said they reduced headcount.
"Banks are still in recovery mode after the financial crisis and coming to grips with the new regulatory environment in which they now operate, which is impacting revenue and driving up compliance costs," said Brian Stephens, national leader of KPMG LLP's Banking and Capital Markets practice.
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