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Economists show continued, but somewhat diminished, confidence in US growth

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Economists show continued, but somewhat diminished, confidence in US growth

Skilled labor shortage continues to inhibit growth.

A survey of business economists from the National Association for Business Economists indicated that while most believe that the US economy is on a strong footing for the rest of 2015, overall optimism has fallen somewhat recently.

“The July 2015 Business Conditions Survey results show a majority of panelists expect solid growth for the remainder of 2015,” said NABE President John Silvia, chief economist at Wells Fargo. “Respondents are marginally less bullish than they were in previous surveys.”

“The panel reports markedly increased shortages in the July survey, especially of skilled labor,” said Survey Chair Jim Diffley, senior director at IHS. “One half of the respondents continue to expect rising wages going forward.” 

“Respondents are marginally less bullish than they were in previous surveys.”

According to the survey, sales growth was less widespread in the second quarter of 2015 than in the first quarter, following a similar slowdown three months ago. Only 46% of panelists in the July survey reported rising sales at their firms last quarter, compared to 49% in the April survey, and 54% in the January survey, which covered the fourth quarter of 2014.

A majority of survey panelists (59%) expects sales to rise during the third quarter of 2015. However, that share represents a decline from the 71% in April that expected second-quarter sales to increase.

Profit margins increased at more firms in the second quarter than in the first. Nearly one-third (32%) of respondents reported wider profit margins compared to the 26% reporting wider margins in the first quarter. Fourteen percent reported that margins shrank, down from 16% in the April survey. In both the July and April surveys, 35% of respondents said they expected profit margins to increase at their firms in the coming quarter, but more respondents to the current survey (10%) than the April survey (3%) said they expected a decline in their businesses’ margins.

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