WASHINGTON - US companies will have to keep hiring steadily to meet their customers’ rising demand.
That’s the message that emerged from a report Wednesday that employers are finding it harder to squeeze more output from their existing staff. It also helps explain why ADP, a payroll provider, estimated last Thursday that companies added 216,000 workers last month.
Those findings reinforced confidence that 2012 will mark a turning point for the long-suffering job market and the economy. Applications for unemployment benefits have tumbled. Consumer confidence is at its highest point in a year. And the stock market has been on a tear.
The brighter signs come two days before the government will issue the February employment report, expected to show a third straight month of strong hiring.
A survey released Wednesday by Duke University’s Fuqua School of Business found that confidence among US chief financial officers has risen to its highest point in a year. As a result, the survey found that companies expect to increase hiring for full-time jobs by 2.1 percent over the next year, up from 1.5 percent in a survey in December.
The survey was released the same day that the government reported a paltry gain in worker productivity at the end of last year. The 0.9 percent annualized increase was half the growth rate from the July-September quarter. Similarly, for the year, US worker productivity grew at its slowest pace in nearly a quarter of a century.
Productivity measures output per hour of work. Slower productivity can squeeze corporate profits. But it can lead to more jobs if it shows that companies can’t derive more production from their workers.
After the recession, productivity soared. After laying off staffers, companies managed to make their leaner staffs more efficient. Such productivity growth tends to slow eventually. “The typical bounce in productivity that we usually see coming out of a recession has run its course,’’ said Troy Davig, an economist at Barclays Capital.
A return to more robust hiring ultimately leads to higher wages and more consumer spending, which fuels growth.
One concern is that labor costs are rising and might be building inflation pressures. Still, some economists say higher prices wouldn’t likely be sustained as long as nearly 13 million Americans remain unemployed and others aren’t being paid enough to keep up with inflation.