Business economists report mixed signals on US economy

22 July 2013 15:30  [Source: ICIS news]

WASHINGTON (ICIS)--US business economists on Monday offered mixed signals about the nation’s economy, noting that sales grew in the second quarter but slowed from the first-quarter pace, while employment improved in the last three months.

In its survey of member economists about performance in the April-June period, the National Association for Business Economics (NABE) said that more than one-third of survey respondents indicated that sales rose at their firms in the period, more than double the percentage of those reporting a sales decline.

However, “a higher share had reported rising sales and a lower share had reported falling sales in the first quarter of 2013,” said Timothy Gill, chairman of the survey committee.

The slower second-quarter gain in sales, he said, may reflect increased headwinds from a weak global economy and tighter US domestic fiscal policy.

But the survey also reported a stepped-up rate of employment growth in the second quarter.

Gill said that “the proportion of respondents indicating payrolls rose at their firms in the last quarter outpaced the share reporting declining payrolls by the widest margin since the fourth quarter of 2011.”

On the downside, capital spending slipped slightly in the second quarter and profit margins narrowed, the survey said.

Despite these mixed signals, said Gill, “NABE’s industry survey panel remains upbeat about the future”.

“The forecast for economic growth improved for a third straight quarter, with more than 70% of respondents indicating they are now anticipating real GDP growth will exceed 2% in the next 12 months,” he said.

In the previous survey covering the first quarter, only 65% of respondents said they expected the nation’s GDP growth would exceed 2% over the next 12 months.

In normal economic times, US GDP would be expected to expand at an annual pace of 3.0-3.5%.

Although growth expectations have improved, Gill said that optimism about the near-term course of the US economy remains guarded.

The outlook among top economists at US companies is clouded by the state of the global economy, the possibility of further government spending cuts and a challenging regulatory environment, Gill said.

In addition, a higher proportion of survey respondents cited rising interest rates as their greatest concern going forward, NABE said.

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

By: Joe Kamalick
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