The National Association for Business Economics conducted a survey during the period 6th to the 15th November regarding the impact that the Republican-backed tax-cuts will have on the economy. The results are a little surprising; the majority see growth boosted by between 0.2% and 0.39% in 2018 with around a fifth looking for higher gains and a fifth seeing absolutely no benefit to growth. Of course, the survey was done almost a month ago and since then the package of tax cuts has changed somewhat in order to get lawmakers approval.
The survey also showed a slight majority of those surveyed expect a U.S. recession starting before the end of 2019 whilst 48% see growth continuing into 2020 and cite trade protectionism as the top risk to growth followed by a big stock market sell-off and higher interest rates.
78% of the economists expect tax-cuts to be enacted during the first half of 2018, but only 35% expect the Trump administration infrastructure spending programme to be kick-started next year, with only 37% expecting that it won’t happen during the current Presidential term at all.
On the long discussed and never yet solved question regarding the lack of wage growth during the current expansion, even as the employment market appears to tighten, 30% of the economists blamed poor productivity growth while 27% explained this was due to low inflation and 19% looked at demographics and the ageing population. However, 100% of the economists that took part added ‘on the other hand’ to every single question in the survey.