Most US mid-sized companies not hiring over the next year

More than half of U.S. mid-sized companies are not planning to hire over the next 12 months or may lay people off, and fewer than a third of the firms expect strong economic growth, a survey said on Monday.

Photo: Most US mid-sized companies not hiring over the next year

The news adds to evidence the U.S. economy may not grow as robustly next year as it did last quarter, when gross domestic product grew at an annualized rate of 3.4 percent.

Not all companies are gloomy about employment -- 47 percent expect to hire, according to the survey from CIT and the Economist Intelligence Unit. But 44 percent of mid-sized companies see their workforce size staying the same, and 9 percent forecast a decline.

Executives are not excessively optimistic about the economy, either, with just 30 percent saying they expect the economy to be strong over the next 12 months, while 38 percent were neutral and 24 percent expect it to be weak.

"Middle-market companies are realists in terms of what the economy will offer them," said Walter Owens, president of CIT Corporate Finance.

But the companies are still optimistic about their own prospects. Nearly two-thirds of the companies polled said they expect their revenue to grow over the next 12 months.

The survey covered companies that generate between $25 million and $1 billion in annual revenue.

These mid-sized companies employ about 32 million people, more than the 22 million employed by large companies in the Standard & Poor's 500, according to the survey.

The U.S. job market has been chugging along steadily at a moderate level. By some measures, it looks strong -- the U.S. unemployment rate was 4.5 percent in June, according to a monthly government survey of households.

But Wall Street watches the government's monthly survey of employers' payrolls more carefully, because it uses a broader sample size, and that has been showing more tepid growth of around 150,000 new jobs a month.

Some economists argue that the payrolls survey ignores smaller and mid-sized companies, which are crucial for the labor market's growth. The Bureau of Labor Statistics tends to survey companies with more than 1,000 employees, Reuters reports.

The respondents to the survey averaged about 700 employees, CIT said.