A recession may not be in store for 2019 but neither is a booming economy, according to the results of the January 2019 NABE (National Association of Business Economics) Business Conditions Survey.
“Most respondents do not expect a recession within the next 12 months, but fewer respondents than previously expect robust economic growth in the year ahead,” says NABE Business Conditions Survey Chair Sam Kyei, CBE, chief economist, SAK Economics LLC. “Respondents are nearly unanimous that growth in inflation-adjusted gross domestic product—real GDP—would remain positive through the end of 2019. Two-thirds of respondents expect growth to exceed 2%; however, that share is smaller than the 90% of respondents in the previous survey—which covered the outlook from the third quarter of 2018 to the third quarter of 2019.”
Fewer survey respondents report rising sales at their firms in the fourth quarter of 2018 compared to the third quarter and profit margin increases became significantly less widespread in the fourth quarter of 2018, according to Kyei.
“Materials input costs are rising at respondents’ firms, especially goods-producing firms. Fifty-three percent of survey respondents report shortages of skilled labor at their firms and the current tight labor market conditions continue to push firms to raise wages, increase training, and consider additional automation,” says Kyei. “However, prices charged by respondents’ firms appear to be anchored at the previous quarter’s levels. Two-thirds of respondents indicate their firms’ prices were unchanged during the fourth quarter of 2018.”
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