NABE November survey suggests restrained confidence in economic rebound

“NABE Outlook survey panelists made only modest revisions to their forecasts for the November report compared with their October projections for economic growth,” said NABE President Richard Wobbekind

By ·

In its most recent survey, the National Association for Business Economics (NABE) projects a sluggish economic recovery.

“NABE Outlook survey panelists made only modest revisions to their forecasts for the November report compared with their October projections for economic growth,” said NABE President Richard Wobbekind, associate dean of the Leeds School of Business at the University of Colorado.

“Projections for real GDP growth remain sub-par through the first quarter of 2011, but accelerate gradually through the forecast period. For next year as a whole, GDP growth is expected to be moderate,” he added.
According to Wobbekind, factors restraining growth going forward include ongoing balance-sheet restructuring by consumers and businesses, and a diminished contribution to GDP growth from inventory restocking and government stimulus.

“Confidence in the expansion’s durability is intact, but panelists remain concerned about high levels of federal debt, a continuing high level of unemployment, increased business regulation, and rising commodity prices,” he said.

The NABE Outlook panel made modest revisions to its economic growth predictions for 2010 and 2011. Real gross domestic product (GDP) is now expected to advance 2.7 percent (year-over-year) in 2010, a slight increase from the panel’s October prediction of 2.6 percent. Next year’s projected 2.6 percent GDP growth rate was unchanged from October’s prediction, and, as is typical in a recovery after a severe financial crisis, shows the lack of a more pronounced cyclical rebound. The projected growth rate for 2011 is slightly below the panel’s current estimate of the economy’s long-term growth trend of 2.7 percent. The survey respondents’ estimate of trend growth has declined by one-quarter-percentage point since 2007.

To a large extent, the latest NABE forecast reflects the view that the economy will struggle against financial headwinds. Forty percent of survey respondents—compared to 37 percent in October—characterize the expansion as “sub-par with severe wealth losses and onerous debt burdens inhibiting spending and lending.” In contrast, 28 percent of respondents feel that “the economy will overcome its headwinds, and behave more in line with a traditional business cycle expansion: real output will grow at a rate above potential, and households and businesses will boost discretionary spending.” The likelihood of either stagflation or the economy slipping back into recession is viewed as relatively low.?

Consumer spending is expected to remain modest throughout the forecast horizon due to weak job gains, persistently high unemployment, and negligible growth in household net worth. This year’s holiday retail sales are still expected to be weak, rising only 2.5 percent from those of last year. Roughly half of the panelists expect the personal saving rate to fall over the forecast period, while the other half of the panel is divided as to whether it will rise further or stay at roughly the same rate.

Labor market conditions will improve slowly. Monthly payroll gains are forecast to average less than 150,000 until the latter half of 2011, at which time gains will improve at a range of roughly 150,000-170,000. Joblessness will remain high, with the unemployment rate persisting at over 9.5 percent or higher through the first quarter of 2011 before easing—but only slightly—to 9.2 percent by year-end 2011.

“This will mark the weakest post-recession job recovery on record,” said NABE spokesmen.

Panelists estimate the current long-run or natural rate of unemployment at 5.8 percent, up by one-half-percentage point since 2007.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

· All Topics
Latest Whitepaper
Gaining Efficiencies Through End-to-end Warehouse Automation
Warehouse and distribution center managers in B2B and B2C have never been under more pressure to scale up their operations to meet customer demands in the new, digital economy. Warehouse Automation Custom digital issue, Peerless custom Automation white paper. Warehouse Automation research papers.
Download Today!
From the September 2016 Issue
The fashion retailer has used warehouse execution software and automation to create a true omni-channel distribution center.
Lift Truck Tips: Knowledge is Power
Software system gives new facility a competitive edge
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
5 Emerging Technologies Enabling Competitive Advantage for Distribution
Come hear about the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids that are enabling competitive advantage for distribution.
Register Today!
EDITORS' PICKS
American Eagle Outfitters’ omni-channel journey
The fashion retailer has used warehouse execution software and automation to create a true...
The data-driven lift truck
Now that manufacturers and distributors are using the data from their automated systems to drive...

Destination Maternity: Destination Automation
Running short of space in its old facility, Destination Maternity Corp. built a new, highly...
Hibbett Sports: Faster, Flexible and Efficient
A high-speed conveyor and sortation system at Hibbett Sports’ Alabama distribution center speeds...