WASHINGTON, June 6, 2011 /PRNewswire/ -- Nearly half of all corporate directors anticipate strong employment growth in their companies in the third quarter of 2011, despite a slightly decreased optimism in the economy. These unique perspectives result from the National Association of Corporate Directors' (NACD) Board Confidence Index (BCI), a leading indicator of the health of the economy as viewed through the corporate boardroom lens.
While directors' overall confidence in the economy fell slightly to 63.1 in Q2 2011 from 64.9 in Q1 2011, the bright spot for directors came around job creation. NACD's BCI found that 48.1 percent of companies' employment activities resulted in a net gain. Companies with market capitalization between $2-10 billion led the way with 61 percent of these companies seeing net gains in employment numbers.
"Since the last BCI, we've seen terrible natural disasters in Japan and the United States, rising food and gas prices, and fears of inflation. It is not surprising that directors' confidence is shaken," said Ken Daly, president and CEO of NACD. "Importantly, that is why NACD has been so active in director education—to ensure that directors have the tools and insights to guide companies, especially through tough times."
Despite the slight decline in confidence, directors were optimistic overall with positive expectations for the next quarter, increasing slightly from 57 in Q1 2011 to 58 this quarter, though confidence in projections for the next year dropped from 69 last quarter to 67 for Q2. Larger companies—those with market capitalization of $2-10 billion and more than $10 billion—were more confident across the board about both conditions compared to a year ago and looking ahead to the next year."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." When asked to compare the current state of the economy compared to a year ago, directors registered a confidence index of 68 in Q2 2011, down from a level of 73 in Q1 2011. Looking at changes in conditions from the previous quarter, as opposed to the previous year, directors' confidence also dropped slightly, registering a 59 in Q2 2011 versus 61 last quarter.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV