Chief executives across the United States expect the Federal Reserve's anticipated increase of benchmark rates this year to have little impact on them and see solid profitability and hiring ahead, according to a survey released Monday.
The poll of almost 1,100 CEOs at small and mid-sized businesses conducted by CEO consulting company TEC International during the second quarter, underscores the swelling business confidence as the economy finally pulls out of its sluggish recovery.
Fewer executives expected economic conditions 12 months in the futures to be better than now, at 59 percent compared with 69.6 percent in the first quarter.
For that reason, the overall CEO Confidence Index fell to 111.9 in the second quarter this from 113.9 in the first, although it is up from 100 in the second quarter a year ago.
More than 80 percent expected revenues to increase over the next 12 months and more than 70 percent expected profits to improve - roughly the same as in the first quarter.
As a result, 59.7 percent expected to hire workers steadily over the course of this year and almost half said higher wages would be the main method of retaining or luring employees.
"Firms planned in the second quarter to hire more employees, increase wages and spend more on investments in new productive capacity," said Richard Curtin, a consultant to TEC International on the survey and head of the University of Michigan's consumer surveys.
As for the Fed beginning to raise its official rate from a 46-year low of 1 percent now to 2 percent by the end of the year, 49.2 percent said there would be no impact on their business, while 41.1 percent said it would have a mild negative impact.
The Fed is widely expected to start raising rates by a quarter-percentage point later this month.
But the strong economy, coupled with historically high energy costs, is also allowing businesses to push up their prices to maintain profit margins, the survey found.
Twenty-three percent of executives said their companies raised prices during the second-quarter, while more than 25 percent planned to push up prices during the second half of the year.