Outlook Swings Toward Optimism for Some Area Executives

Washington area business owners and executives are trying to be optimistic about their prospects for the months ahead, according to a poll to be released today: Fifty of 200 surveyed -- about twice the number who felt this way in February -- say they likely will expand their staffs within the next six months.

The poll, sponsored by the Greater Washington Board of Trade, is hardly a harbinger that a full economic recovery is around the corner. Clearly, the vast majority of the executives expressed no plans for bringing on new workers.

Still, 25 percent of those surveyed this month said they expect to increase their workforces, up from 12 percent in February. And 7 percent said they expect to cut staff, down from 20 percent in February. At the same time, more executives say their businesses declined -- 57 percent in June, compared with 52 percent in February.

"The answers were very surprising how positive the outlook is over the next six months," said James C. Dinegar, the board's president and chief executive.

The survey was conducted by a research firm that interviewed business leaders by phone. Not all of the executives took part in both the February and June surveys.

Taken with other, more bleak data, the survey helps paint a decidedly mixed picture of the region. Some regional economists have said the worst could still come.

The jobless rates in the District, Virginia and Maryland either stabilized or dropped slightly in April, only to shoot back up in May. D.C.'s unemployment rate is now 10.7 percent, well above the 9.4 percent national average.

With mass layoffs on the rise, economists are forecasting that the unemployment rate will increase again when the Bureau of Labor Statistics releases new numbers next week. Some estimate that 15,000 new jobs are being created in the region -- well below the 50,000 needed to significantly reverse the unemployment trend.

The report also says that:

-- The business outlook index, which measures executives' expectations of current and future conditions, rose to 69 from 40.

-- More than half of those polled plan to offer new products and services, and 45 percent will buy new equipment over the next six months.

-- Fewer executives think economic conditions are bad -- 42 percent in June, compared with 53 percent in February.

"The bottom -- when things seemed the direst -- was last winter. In February, the news seemed to be getting worse and worse and worse," said John McClain, senior fellow at the Center for Regional Analysis at George Mason University.

"Some businesses may have seen a bottoming of revenue and now are seeing an uptick and stabilization," he added. "If that's true, they're thinking about expanding, and that's a positive sign."