NABE: ‘Sizable Housing Rebound’ in Works for 2010
Panel forecasts housing starts will improve 36% in 2010.
The National Association for Business Economics has released its November 2009 Industry Survey, in which NABE panelists have increased their expectations for growth in 2010. "While the recovery has been jobless so far, that should soon change," said NABE President Lynn Reaser, chief economist at Point Loma Nazarene University. "Within the next few months, companies should be adding instead of cutting jobs."
Panelists expect a "sizable housing rebound, low inflation, and further rise in stock prices." Panelists are also "mostly optimistic" that the Federal Reserve’s policies will not lead to higher inflation.
NABE expects 3% pace of real GDP growth in the fourth quarter 2009, and 3.2% gain over four quarters of 2010.
NABE panelists believe the end of net employment losses is near, with modest declines during the fourth quarter followed by a "bottom" in the first quarter of 2010 and gains after that. Most panelists don’t expect a complete recovery of previously lost jobs until 2012.
Housing recovery will gather momentum. Panel expects housing starts and residential investment to rise sharply in 2010, with housing starts increasing 36% and residential investment up 9%. Low house prices and interest rates will help drive this improvement.
Inventory liquidation of 2008-2009 will hit bottom by the end of the year with restocking started again in 2010. Business spending on structures will continue to decline, but at a slower pace than in 2009.
The dollar will weaken further in 2010 but will stabilize against the euro.
Inflation will remain low, due to "substantial labor market slack and further productivity gains."
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