WASHINGTON, July 9: US businesses are cutting jobs despite a bounce in demand and an emerging investment recovery, a National Association of Business Economists (NABE) survey showed on Tuesday.

The NABE findings were based on a survey of 123 of its members about conditions in their firms or industries.

“There is good news for the economic recovery as industry demand bounced back from a weak first quarter, while capital spending rose modestly after eight quarters of decline and is projected to continue strengthening this year,” said NABE president and chief economist Tim O’Neill.

“The news for labour is more sombre as employment fell again and is expected to decline further in the next six months. As well, wage increases posted their weakest result in the 21-year history of the survey,” he added.

The economy was displaying its three-year-old “split personality” of strong finance and services sectors, but shrinkage in manufacturing, transport, utility and telecommunications, he said.

A net 27 per cent of the NABE economists reported rising demand in their industry or business in the second quarter of 2003, up from a net seven per cent in the first quarter.

After eight quarters of decline, a small majority of NABE analysts — a net three per cent — also reported an increase in investment, largely because of increased spending by the finance industry.

But a net 16 per cent of those polled reported a decline in employment.

The outlook also was grim, with a total 24 per cent of the analysts expecting a decline in jobs in the next six months, compared to 20 per cent expecting an increase in jobs.

Wages were weak, with only a net three per cent of the analysts reporting a rise in wages and salaries — the lowest level since the NABE industry survey began in 1982.

Just 10 per cent of the panel members reported rising wage and salaries, compared with seven per cent reporting a decline. The vast majority — 83 per cent — reported no change.

NABE economists held out little hope of a dramatic leap in economic growth for the rest of 2003.

For the second half of this year, 34 per cent of the analysts expected real gross domestic product (GDP) growth to average between one and two per cent, 33 per cent forecast growth of two to three per cent and 21 per cent tipped growth of three to four per cent.—AFP