US business economists forecast tepid growth this year and next

15 October 2012 17:55  [Source: ICIS news]

WASHINGTON (ICIS)--US business economists expect only tepid growth in the nation’s economy for this year and next, a key survey reported on Monday, but they also foresee near-normal GDP growth of 3% by the end of 2013.

In its quarterly survey of top corporate economists, the National Association for Business Economics (NABE) said US gross domestic product (GDP) growth this year likely will top out at 1.9% and rise slowly to a full-year GDP rate of 2.4% in 2013.

In normal economic times, the US economy would be expected to expand at an annual pace of 3% to 3.5%. NABE said a near-normal 3% growth rate likely will be reached in the fourth quarter next year, which will help bring the full-year 2013 GDP up to the forecast 2.4%.

The survey said that the US unemployment rate likely will see a slight bump higher in the fourth quarter this year to 8.1%, reversing in part the drop to a 7.8% jobless report in September.

But while the unemployment rate is likely to rise slightly for the final quarter of this year, the NABE outlook anticipates “a pattern of slow but steady employment growth” in the new year.

“Monthly job growth in 2013 is expected to average 155,000,” the outlook said, “with the unemployment rate falling to 7.8% by the fourth quarter of 2013.” 

The US economy must generate about 150,000 jobs monthly just to accommodate new workers entering the employment market.

The business economists expect that a continuing if slow recovery in the US housing sector will help drive growth in the new year.

“The economists surveyed expect total housing starts will reach 750,000 units in 2012, up from 610,000 in 2011,” the outlook reported, adding, “The forecast for 2013 shows continued improvement, with housing starts reaching 850,000 units.”

Housing starts in the 800,000-units range would still be below the 1m annual new homes that had previously been considered the “floor” pace for housing construction and far below the 2m or more new homes built annually during the 2003-2006 US housing boom.

The US housing sector, especially new home construction, is a crucial downstream consumer industry for the nation’s petrochemical producers and other manufacturers of chemicals and resins.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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