Business survey shows 'recession is abating'

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NEW YORK (CNNMoney.com) -- A key survey of leading businesses showed Monday that the nation's economy remained weak in the first quarter, but it also hinted that the decline is slowing.

The National Association of Business Economics' April Industry Survey "provides fresh evidence that the U.S. economy's recession is abating," said Sara Johnson, an analyst on the survey and an economist at IHS Global Insight.

"Declines still out number gains, but fewer firms are reporting declines and more are reporting gains," Johnson said in a statement. "This suggests that the economy is at an inflection point but has not yet reached a turning point."

The survey is based on data from 109 businesses and industry groups from the first quarter of 2009.

Among the survey's bright spots were less severe declines in industry demand and capital spending.

The number of businesses reporting rising demand for their products increased to 27% in the first quarter from 20% in January.

Meanwhile, the number of firms that increased capital spending last quarter rose to 15% from 12%. Looking ahead, 6% of firms expected to raise capital spending by more than 10% over the next 12 months. In January, no companies had such plans.

While the pace of the recession may be moderating, businesses continued to grow more pessimistic about the overall economic outlook.

A full 93% of respondents expect the nation's gross domestic product, the broadest measure of economic activity, to decline this year. Over half see a drop of 2% or more.

Employment also remained depressed in the first quarter. The survey found that 39% of firms cut payrolls, while only 14% added workers. But the outlook for jobs in the near future is slightly better: 33% of companies plan to reduce payrolls over the next six months, while 16% plan to increase employment.

Still, for those with jobs, income levels were dismal in the first quarter. For the first time in the history of the survey, more firms were reducing wages and salaries than were raising pay.