A survey of corporate economists predicts the economy will expand over the next year, although the pace of growth will decline and employers are facing pressure to raise wages, spend more on worker training and automate tasks because of the low unemployment rate.
Just 53% of the economists polled for the National Association for Business Economics’ April survey, released Monday, expect the economy to grow by more than 2% this year, down from 67% who felt that way in January. The results from the survey released Monday suggest a sharp slowdown after the Commerce Department reported Friday that the economy grew at a strong 3.2% during the first quarter.
The economy grew quickly during the first three months of 2019 because of a surge in company inventories and a shrinkage in the trade gap, temporary factors that are likely to fade.
Businesses increased imports at the end of 2018 out of concern that President Donald Trump could further escalate tariffs against China, but the administration held off to conduct trade talks with the world’s second largest economy.
However, the NABE survey found that the tariffs already imposed by Trump have been a drag. For economists involved in goods producing, 75% said the import taxes were a negative.
Still, profit margins were rising in 32% of the corporate economists’ firms, up from 23% previously. More than half — 52% — say there was a shortage of skilled labor, a sign of possible wage pressures.