MORE businesses want to hire more employees in the third quarter (Q3) of this year than they intend to expand their operations, a recent survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

Business Expectation Survey (BES), the percentage of businesses planning to expand in the industry sector has dropped to 17.9 percent from 20.8 percent in the previous survey.

“For the next quarter, the percentage of firms in the manufacturing and the electricity, gas and water subsectors that reported expansion plans decreased, while that of firms in the mining and quarrying with expansion plans increased and that of the agriculture, fishery and forestry subsector was steady,” the BSP said.

The percentage decreased from 25.6 percent to 24.4 percent in the ensuing 12 months.

“For the next 12 months, the percentage of firms in the manufacturing subsector with the intention of expanding business operations declined,” the Bangko Sentral observed.

Contrarily, the percentage of businesses in the mining and quarrying and the agricultural, fishing and forestry subsectors planning to expand operations over the next 12 months increased, while it remained stable in the utilities subsector, it continued.

However, the poll indicated that 25.4 percent of respondents, up from 24.7 percent in the prior survey, feel optimistic about job prospects for the upcoming quarter. Over the next 12 months, it likewise increased from 28.9 to 30.7 percent.

The central bank said “the higher positive readings for Q3 2022 and the next 12 months suggest that firms are looking forward to hiring more people in the next quarter and the next several months.”

The expansion and employment outlooks compare with the less optimistic business sentiment for July to September of this year.

The confidence index, which assesses enterprises’ outlook for future growth, fell to 46.4 percent for the third quarter of 2022 from 59.7 percent the previous quarter.

“The respondents’ less optimistic outlook for the next quarter was attributed primarily to the: (a) uncertainties during the leadership transition; (b) continuing public health risks posed by Covid-19; (c) concerns over rising inflation and its impact on business operations; and (d) seasonal downturn in production due to weather disturbances,” the Bangko Sentral said.

It said that other responding firms’ reasons for their less optimistic outlook for the third quarter of 2022, include increasing manufacturing costs of automotive components, the negative consequences of the Russia-Ukraine crisis and lockdowns in China caused by Covid-19.

The most current BES questioned 1,509 businesses nationwide from April 18 to June 1 of this year.