NABE September Business Outlook
The National Association for Business Economics (NABE) recently published their September 2014 business outlook summary. NABE’s panelists presented their views on the path the economy will take during the rest of 2014 and into 2015. The information should prove useful for local businesses as they plan for Q4 and the coming fiscal year.
Here are NABE’s key findings:
- Respondents expect the economy to stabilize after a fairly volatile Q1/Q2. Real GDP should advance at about 3% for the rest of the year and into 2015.
- GDP growth is down 1.1% in 2014 when compared to 2013, but is expected to rebound back to 2013 levels over the next year.
- The panelists were optimistic in their forecasts for international trade, government spending, and fixed business investments. They had weaker expectations for consumer spending and residential investment, due primarily to weak income growth and a continuing difficulty in accessing credit for most consumers.
- Jobs are expected to increase at about 200,000 a month, leading to a decrease in the unemployment rate to 5.7% by the end of 2015.
- Inflation is expected to rise over the next period as well.
What Does It Mean for Local Business?
The NABE forecast is consistent with the country’s slow climb out of recession. With GDP increasing, the economy is on the mend, albeit slowly.
With predictions for the second half of 2014 looking less rocky than the previous one, businesses should, hopefully, see more consistent growth as well.
The data looks most promising for Bellingham companies that contract with the government and overseas. The panelists were optimistic in their forecasts for both these areas, so these businesses should expect to see some growth over the coming months.
Unfortunately, the same growth may not apply to small companies that do business locally. The NABE October Salary Survey showed that companies are still having no trouble finding workers to fill openings, and are, therefore, not being pressured to raise wages.
With stagnant salary growth and rising inflation, consumers will be able to do less discretionary spending. This may mean that local businesses in food service and non-essential goods will not see as much growth.
Lack of credit availability will mainly affect local real estate. The Johnson Team Real Estate blog recently noted that the market has already slowed noticeably from 2012-2013. The NABE forecast indicates this trend will continue.
The takeaway from the NABE survey is that the economy is still growing, but the immediate effects may not be felt as strongly by small local businesses over the coming year.