Who’s right – economists or association leaders?
A strong majority of respondents in a recent survey of business economists are more optimistic about Gross Domestic Product growth in 2012 compared to the survey's findings from the last quarter.
This contrasts with the business outlook by association executives in the latest Association PULSE Report
Two-thirds of the panelists of the monthly industry survey, conducted by the National Association for Business Economics, expect that real GDP will grow at a rate exceeding 2 percent between the fourth quarter of 2011 and the fourth quarter of 2012. More than 80 percent of respondents reported unchanged or rising sales and profit margins. The survey results also suggest greater stability in prices. Nearly all respondents expect that nonlabor input prices will remain unchanged or rise by 5 percent or less.
This is an improvement on the 2011 forecasts of real GDP growth in the last survey in October, in which only 16 percent of respondents expected real GDP growth over 2 percent between the fourth quarter of 2010 and the fourth quarter of 2011.
More than 70 percent of respondents reported that wages and salaries have remained unchanged. The share of respondents reporting unchanged prices charged (78 percent) is the highest share in recent surveys and almost all respondents expect either no change in prices or minor price increases of 5 percent or less by their companies. Materials costs rose for 31 percent of respondents and were unchanged for 59 percent of them, which suggests a continued trend toward greater stability in materials prices, according to NABE.
Although the share of respondents expecting increasing employment over the next six months continues to fall relative to prior quarters, almost two-thirds of respondents expect no change in employment — the highest percentage of panelists holding such a view in recent quarters.
Association executives are not so optimistic about their respective industries. According to the TRENDS Fall 2011 Association PULSE Report, only 10.4 percent are optimistic about the U.S. economy, with 68.8 percent pessimistic. Among professional society executives, optimism in the economy was slightly better, 11.6 percent, while pessimism stood at 57.9 percent.
Of projected industry sales/shipments, 26.4 percent of trade association executives believed sales would increase, while 55.5 percent said sales would stay even.
When it comes to employment, 58.9 percent of trade association executives believe employment will stay the same, while 21.4 percent believe employment will decline; 53 percent of professional society executives believe employment will stay flat, while 29.1 percent say employment will decline.
Details: www.nabe.com; for questions about the TRENDS PULSE Report, contact Autumn Jones, ajones@AssociationTRENDS.com.
