17 December 2012 18:23 [Source: ICIS news]
WASHINGTON (ICIS)—The US economy likely will expand at a moderate pace in 2013, a key survey of economists said on Monday, but growth will still be below normal and the unemployment rate probably will remain at or near the current 7.7%.
In its annual outlook, the National Association for Business Economics (NABE) said that the nation’s economy will accelerate steadily through 2013 and even reach a minimally normal GDP growth rate of 3% in the fourth quarter.
But for full-year 2013, the business economists are forecasting GDP growth of only 2.1%, a marginal decline from the expected full-year 2012 pace of 2.2%.
In normal economic times, the US economy would be expected to grow at 3.0-3.5% annually.
The modest economic expansion forecast for next year may well ride on continuing advances in the long-depressed US housing sector, which by all accounts finally began to recover this year.
The economists surveyed by NABE said they expect US housing starts will be around 930,000 units in 2013, a 20% improvement from the likely 2012 total of some 770,000 new homes built.
That outlook for nearly 1m housing starts in 2013 seems even better against the actual 2011 new home construction total of 610,000, according to NABE.
An improving US housing sector, especially new home construction, is important to the nation’s chemicals manufacturers because home construction is a major downstream consuming industry for chemicals and plastics.
But other than the housing sector, the NABE economists do not see anything like robust growth in business.
The survey respondents “forecast little improvement in consumption growth, significantly reduced growth in investments in non-residential structures, equipment and software, and reduced growth in corporate profits and industrial production”.
In addition, almost half of the economists surveyed are worried that the European debt and currency crisis will worsen in the new year, with Spain, Italy and Ireland requiring bailout packages or additional EU subsidies.
And 20% of the economists said that Greece could leave the euro currency next year.
That outcome would likely trigger an even larger European-wide crisis and yet another new recession whose results would wash up on US shores by sharply reducing export sales to the EU.
On employment, NABE said it foresees little growth, with the full-year 2013 unemployment rate at 7.7%, which is the current ratio of US workers without jobs.
But, the economists noted, if the US jobless rate holds at 7.7% next year, that will be an improvement from the expected full-year 2012 unemployment pace of 8.1% and the 2011 rate of 9.1%.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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