The 2020 Mid-Year Economic Update_long

Surveys Show Business Leaders’ Growing Confidence in Economy

IMI tracks a wide array of data and economic resources to triangulate and validate our market models. Here are some of the trends we see.

IMI tracks a wide array of data and economic resources to triangulate and validate our market models. Following are some of the trends we see.

More optimism is on the horizon, as a slew of recent surveys highlight growing confidence in the economy by business leaders.

In the recently released September 2014 Outlook Survey from the National Association of Business Economists, respondents expected the pace of economic growth to steady “following an unusually high degree of volatility in the first half of the year,” according to NABE President-Elect John Silvia, who is the chief economist at Wells Fargo.

The median forecast from the respected group calls for real GDP to grow at an annualized rate of 3 percent in the third and fourth quarters of 2014 and throughout 2015. The overall pace of growth in 2014 will be closer to 2 percent, according to the report, due to slower growth in the first half of the year.

While positive, the outlook is tempered compared to one released by NABE in June. But NABE Outlook Survey Chair Timothy Gill says views are still stronger than those expressed in early July.

Of particular interest, panelists are more optimistic about:

·         Business fixed investment

·         Government spending

·         International trade activity

On the other hand, the panel noted weak expectations for consumer spending and residential investment.

Other surveys out this month supported the NABE results:

Nineteen percent of those surveyed in the Fourth Quarter 2014 Manpower Employment Outlook Survey in the U.S. plan to hire in the fourth quarter 2014. A little less than three-quarters plan to keep their workforces steady, and only 7 percent plan to let employees go. Mining and wholesale and retail trade were among those that had a positive jobs outlook in the survey.  By state, respondents from North Dakota, Arizona, Texas, Wisconsin and Mississippi were the most likely to have a positive outlook. Check out this infographic highlighting Manpower’s U.S. results.

Small businesses increased employment by an average of 0.24 workers per firm in September, seasonally adjusted, according to the latest National Federation of Independent Businesses’ monthly economic survey. The growth was the twelfth positive month in a row and the largest this year. According to NFIB, “reductions in employment are becoming less frequent and smaller.” Still, about 40 percent of the owners in the survey that tried to hire in the past three months reported few or no qualified applicants for open positions.

Just as with economic indicators published by the government, outside data such as those highlighted in this blog need to be just part of the picture when making plans for your business.

In fact, while useful, survey data is limited in its applicability given its typically narrow focus and audience of respondents. However, when this survey data is placed next to other positive reports, it’s easy to see that while the past five years have been, at the risk of sounding cliché, a rollercoaster ride, things are finally looking up across the U.S. Business leaders have a much-needed sense of confidence going into 2015.

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