Survey of economists finds optimism about growth prospects
WASHINGTON, D.C. — Business economists are generally optimistic about the U.S. economy with most expecting stronger growth than last year’s poor performance.
Economists surveyed by the National Association for Business Economics also expect improved or unchanged sales and profits at their companies in the second quarter, with most reporting no changes in hiring or investment in response to policy changes expected after the November election.
Nearly two-thirds of economists in the poll released Monday expect gross domestic product growth of 2.1 percent to 3 percent in the next four quarters. That would be a significant improvement from anemic growth of 1.6 percent in 2016, the weakest showing in five years. Since the Great Recession ended in June 2009, the economy has averaged annual GDP growth of just 2.1 percent, the slowest recovery since the end of World War II. Only 1 percent of the economists expected no growth or a decline in GDP during the next year.
President Donald Trump has pledged to boost GDP growth to 4 percent or better, though private economists are doubtful he can achieve that goal given the headwinds the economy faces from an aging workforce and disappointing productivity growth.
The survey also found that 91 percent of those polled expect rising or unchanged inflation-adjusted sales in the second quarter. That’s down slightly from the results in January. Fifty-three percent expected sales to rise, down four percentage points from January’s survey.
In part due to better pricing, 89 percent expected profits to rise or stay unchanged this quarter, up four percentage points from January. Thirty-one percent expected profits to grow, down one point from January’s survey.
As far as prices are concerned, 94 percent of the economists predicted they would rise or stay stable, up three percentage points from January. But the percentage expecting rising prices dropped four points to 31 percent.
Ninety-two percent of the economists expect to hire more people or keep their workforce stable this quarter, with 27 percent predicting increased hiring. The percentage expecting falling employment was 9 percent, down 5 percentage points from the January survey.
The survey of 97 economists on business conditions with their firms or industries was taken between March 21 and April 6.