Sep. 17--DURHAM -- Federal Reserve chairman Ben Bernanke pronounced the recession "very likely over" Tuesday, and from the looks of Duke University's quarterly survey of chief financial officers released Wednesday, that might be the case, just not for workers.

In third quarter 2009, 57.7 percent of CFOs surveyed at 657 U.S. companies were more optimistic about the overall economy, compared with 53.7 percent in the second quarter. When it came to their own companies, 47.8 percent of CFOs were also more optimistic in the third quarter, compared with 39.9 percent three months prior.

"I think this all points to the economy bottoming out and firms getting ready for positive growth," said John Graham, a finance professor at The Fuqua School of Business and the survey's director.

CFOs also showed improved outlooks in capital spending and employment in the next 12 months, but survey results also point to more bad times ahead for workers.

In the second quarter, CFOs had expected capital spending to drop by 11.5 percent and employment by 5.6 percent. CFOs were more optimistic in the third quarter, saying they expected declines of 3.2 percent in both capital spending and employment.

Campbell Harvey, founding director of the survey and international business professor at Fuqua, said it's good news that employment losses are expected to moderate, but there is still bad news in the mix.

"First, the outlook points to increased unemployment; second, there is an expected surge in outsourcing, suggesting many U.S. jobs could be lost forever," he said in an announcement of the results.

CFOs said outsourcing is expected to increase by 2.6 percent at their companies in the next 12 months for the September report.

Graham said in the results summary that capital spending is improving, but "for full economic recovery, we need to see capital spending increase by double digits, rather than simply treading water as we're seeing now."

The CFOs surveyed also still expected the economy to not recover by the end of the year. In answering the question of when "the U.S. economy [will] begin recovery," the median answer was: 6.9 months.

In the June survey, CFOs also expected the recession to last through 2009.

However, Graham said, his interpretation of the overall data is that the recession is ending, as Fed chief Bernanke said Tuesday.

"The trend is positive in [research & development] spending, wages, and advertising [not strong ... but positive trend]. Productivity is expected to rise," he said in an e-mail. "However, the big problem is that they do not plan to hire employees at a rate proportional to economic growth. So, while GDP may rise, employment will rise more slowly, and in fact may decline over the next six months."

Some more bad news for employment from the survey results: Among the 62 percent of companies that said their current number of employees is less than 2007, 13 percent said their workforce will return to 2007 levels by year-end 2010. Another 33 percent said by year-end 2011, while 54 percent said workforce levels will remain under 2007 levels until 2012 or beyond.

-----

To see more of The Herald-Sun, or to subscribe to the newspaper, go to http://www.herald-sun.com.

Copyright (c) 2009, The Herald-Sun, Durham, N.C.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

A service of YellowBrix, Inc.