Confidence among U.S. chief executive officers improved at the start of the fourth quarter as more forecast stronger sales and spending on equipment, a survey showed.

The Young Presidents’ Organization gauge of sentiment rose to 59.9 in October from 57.5 in July, according to the Dallas- based group. A reading greater than 50 shows the executives’ outlook was more positive than negative.

Forty-nine percent of CEOs said they expect economic conditions to be better in six months, while 60 percent said sales will be higher in the coming year. The outlook for corporate investment also improved, with 38 percent expecting to spend more in the next 12 months.

The survey by the nonprofit service organization indicates the world’s largest economy may be poised to strengthen after cooling in the second half of 2010 as the lack of jobs constrained consumer spending. Last week Federal Reserve policy makers announced a second round of large-scale asset purchases in a bid to boost growth.

“Particularly encouraging was the improvement in hiring expectations, the brightest outlook yet for fixed investment, and the first signs of improvement we’ve seen in the construction sector since YPO began the survey.” David Maney, spokesman for the survey and chairman and co-founder of Headwaters MB, an investment bank in Denver, said in a statement.

Staff Levels

Thirty-six percent of leaders surveyed said they plan to expand hiring, compared with 30 percent in the last survey. Companies hired more workers than forecast in October, a Labor Department report showed last week.

The proportion of CEOs indicating they’ll keep staff levels at about the same a year from now decreased to 56 percent in the October survey from 62 percent in the July poll. About 8 percent plan to reduce payrolls.

The percentage of respondents in October projecting stronger sales in the coming year rose from 57 percent in July, the survey showed.

The capital spending index climbed to 58.2, the highest level since the group began keeping records last year.

CEO confidence in the economic outlook was most upbeat in production and services and turned positive in the construction industry for the first time since April.

The quarterly survey was based on responses from 1,167 U.S. CEOs and conducted during the first two weeks of October.