The economic expansion will continue but growth will slow over the next 12 months, especially in goods-producing businesses affected by U.S. trade tariffs.
That’s one of the key takeaways from the latest Business Conditions Survey released by the National Association for Business Economics.
Less than half of respondents to the survey expect GDP growth, adjusted for inflation, will rise by more than 2% over the next four quarters — down from 53% in April and 67% in January.
“Lower growth is expected over the next 12 months,” said NABE President and KPMG Chief Economist Constance Hunter, in a statement. “It is important to note, however, that all respondents still expect the current economic expansion to continue during this timeframe.”
U.S. GDP rose 2.1% in the second quarter, according to preliminary data released by the Commerce Department, down from 3.1% in the first quarter and following 2.5% growth for all of 2018 — well below the White House’s 3% target.
Seventy-six percent of business economists working in the goods-producing companies reported that tariffs have had a negative effect on business conditions at their firms, resulting in higher costs and lower sales.
Also for the first time in seven years, business economists reported as many price increases as declines over the past three month.