U.S. businesses are experiencing the worst conditions in 27 years as the year-long recession deepens and more companies expect to cut jobs in the coming months, according to a survey released Monday. The quarterly industry survey from the National Association of Business Economics (NABE) found that the recession worsened in the fourth quarter of last year and the majority of respondents expect gross domestic product (GDP) to contract at a faster pace in 2009. “The NABE's industry survey depicts the worst business conditions since the survey began in 1982, confirming the U.S. recession deepened in the fourth quarter of 2008,” said spokeswoman Sara Johnson. About 47 percent of respondents—a record high—reported a decline in demand for goods and services, while only 20 percent experienced an increase. Weak demand was more evident in the manufacturing sector, where 79 percent of companies reported falling demand. Declining demand left most companies pessimistic about the 2009 economic outlook. About 78 percent of respondents expected GDP to be lower than last year. More than half of the respondents thought GDP would fall by more than 1 percent. In the last NABE survey in October, only 38 percent of respondents expected a decline. Weak demand and a lack of available credit are forcing companies to reduce capital spending and cut jobs, the survey found. About 39 percent of companies said they plan to reduce workers over the next six months. About 45 percent expect no change in hiring plans, while about 17 percent said hiring would increase. “Job losses accelerated in the fourth quarter, and the employment outlook for the next six months has weakened further,” Johnson said. Job losses were expected to continue in the first half of 2009, with most of the layoffs seen in sectors such as manufacturing, finance, real estate, transportation, utilities, and communications, the survey said. The U.S. economy fell into recession in December 2007 and there are concerns that downturn—triggered by the crash of the domestic housing market—could be the worst since the 1930s. The housing market collapse and the resulting global credit crisis have eroded household wealth, causing sharp cutbacks in spending and sharply lowering demand.
