NEW YORK (AFP) - Most business economists predict that US economic growth will surpass 2 per cent over the next year, despite softening in some business conditions, according to a survey released on Monday (Oct 23).
The improving forecasts for US growth come amid a weakening profit outlook and continued uncertainty over thorny debates in Washington on trade and tax policy, said the National Association for Business Economics, summarising a quarterly survey of 85 economists.
"Policy developments, including those affecting the North America Free Trade Agreement, remain on the panel's list of concerns, but continue to have limited impact on business decision-making with regard to hiring or investment," said Emily Kolinski Morris, chief economist at Ford.
"The recent hurricanes appear to have had relatively limited impact on respondents' firms, with more than 80 per cent of panelists reporting no anticipated impact on their business in the third or fourth quarters due to Hurricanes Harvey and Irma."
The outlook for real gross domestic product growth "improved materially" in the October survey compared with July, the report said.
Eighty per cent of the group predicted that growth would run between 2.1 per cent and 3 per cent over the next 12 months, while 15 per cent saw it running between 1.1 per cent and 2 per cent, the report said.
Although US growth came in at 3.1 per cent in the second quarter, according to official data, growth was just 1.2 per cent in the first quarter. US growth came in at 1.5 per cent in 2016 and 2.9 per cent in 2015.
The survey found business economists broadly upbeat on future sales and most firms not reporting difficulty hiring staff despite lower unemployment levels.
On the downside, the report showed fewer firms expect profit margins to rise compared with the July survey. Businesses also reported an increase in materials costs, although this benchmark in October was still below the level in January and April.
Some companies in quarterly earnings releases in recent days have cited US hurricanes as a factor in tightening supplies of some petroleum-linked items, leading to higher prices on raw materials.