A poll that involved corporate economists has returned results that show the belief that the U.S. economy will expand by 2020.
The survey, however, also indicates that the tempo at which the economy will grow will reduce as employers grapple with pressure amid the clamor for wage increases.
The pace will also be affected by the need for companies to spend a lot more on employee training and work automation resulting from the low rates of unemployment.
The National Association for Business Economics’ survey which was released on Monday, indicate that only 53 percent of the economists are optimistic of a more than 2% economic growth this year. Comparatively, previous polls had more than 67 percent of those polled expressing an optimistic sentiment as early as January this year.
The poll results are an indication of a sharp slowdown. This follows an announcement released by Commerce Department on Friday reporting on the economic growth in Q1, which stands at a strong 3.2percent.
The presence of some temporary factors like a sharp increase in company inventories and the trade gap shrinking has accelerated economic growth in the months of January to March this year. However, they are likely to dwindle as the year moves and other factors come into play.
Also important has been the anticipation that U.S. president Donald Trump will raise trade tariffs against China, following the trade war. Even though both camps have since toned down a bit and progress made, businesses had already responded to these threats by increasing their imports by the close of 2018.
The Trump administration has seen to it that trade talks between the United States and the second largest global economy have continued, an aspect that could be thawing sentiment from the trading community.
NABE’s April survey did find already imposed tariffs were hurting trading, with 75 percent of economists in the goods production industry terming them as negative.
32% of the corporate economist’s firms have recorded a rise in profit margins compared to the previous 23%. 52% of the economists pointed out that there was a dearth for skilled labor, attributing this to wage pressures.