Hesitant on hiring, US employers wait, watch

Associated Press

NEW YORK

Business has picked up. Yet American companies are too nervous to step up hiring.

The economy seems so gripped by uncertainties that many employers have decided to manage with the staff they have. They aren’t convinced their customer demand will keep growing. Or they worry that Europe’s festering debt crisis could infect the global economy. Or they aren’t sure what Congress will do, if anything, about taxes and spending in coming months.

All that helps explain why U.S. employers added just 69,000 jobs in May, the fewest in a year and the third straight month of weak job growth.

“If you’re anxious, you sit on your hands,” said Chad Moutray, chief economist at the National Association of Manufacturers.

The U.S. government also is nearing its debt ceiling. It was just last summer that a bickering Congress rattled markets by nearly allowing the government to default on its debt.

State and local spending levels are uncertain or shrinking as governments try to shrink their own debts. The result is smaller budgets for schools, transportation projects and services.

Companies also complain that changes in environmental regulations and business subsidies are too hard to predict and plan for.

Here’s a look at why some individual employers remain hesitant to hire:

For many companies that build highways, hiring plans are on hold while Congress debates long-term plans to pay for construction projects.

“I’ve got paving crews that are ready, willing to go to work next week, but I don’t have contracts that I can have them go to work on,” said Ed Dalyrimple, vice president of Chemung Contracting Corp., based in Elmira, NY.

The company, which operates gravel quarries and asphalt plants and does highway and airport runway paving, relies heavily on government work in New York, Pennsylvania and Virginia.

Jason Speer is nervously watching Congress and possible tax changes as Bush-era income-tax cuts near expiration at year’s end. He’s a vice president of Quality Float Works of Schaumberg, Ill., which makes devices to monitor fluid levels in tanks.

Speer says he’d feel a lot better about hiring later this year if it weren’t for the uncertainty about federal taxes. Unable to anticipate his company’s costs, Speer says he can’t make decisions about growth and hiring.

NRG Systems, a Hinesburg, Vt., maker of sensors to measure wind speeds for the energy industry, announced the first layoffs in its 30-year history in mid-May.

The U.S. wind industry is in the doldrums. That’s because a key renewable- energy subsidy is set to expire this year, electricity demand is weak and electricity prices are low because of lower natural-gas prices.

“This is the worst it’s ever been,” said Abby White, a company manager. “The U.S. market has pretty much dried up.”