The latest quarterly survey of buisness economists run by the National Association for Business Economics (NABE), presents both good news and bad news. The good news is that the economists believe that we have turned the corner and the economy is starting to recover. The bad news is a vast majority of respondents felt the fiscal stimulus had no impact. In other words the United States wasted almost a trillion dollars.
NABE conducted the study by polling 68 of its members who work at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the Recovery Act, passed in March 2009 without anyone reading it. The economist feel the same way about the recently passed $17.7 billion jobs bill that calls for tax breaks for businesses that hire and additional infrastructure spending. More than two-thirds of the economists polled feel the new bill won’t help with jobs either.
“NABE’s April 2010 Industry Survey confirms that the U.S. recovery from the Great Recession continues, with business conditions improving,” said William Strauss, Federal Reserve Bank of Chicago. “Industry demand moved higher compared to results in the January 2010 report, pointing to stronger growth in 2010. While input costs have been increasing, prices have also been moving higher, allowing profits to continue to rise. After more than two years of job losses, job creation increased in the first quarter of 2010, suggesting a better outlook for hiring over the next six months. Little of the improvement to date in job growth can be attributed to the stimulus bill enacted in February 2009. Capital spending remained steady. Tight credit conditions continued to negatively impact business conditions.”
Other poll results include:
- The vast majority (73%) of respondents reported the fiscal stimulus enacted in February 2009 has had no impact on employment to date. While 68% also believe a jobs bill, such as the one recently enacted into law, will have no impact on payrolls, 30% do believe it will boost payrolls moderately.
- Industry demand increased for a third consecutive quarter
- More than half of the NABE survey respondents said that some portion of their firms’ sales came from foreign based operations, with 14% indicating that more than half of their sales were from foreign sources.
- Expectations for economic growth in 2010 have improved significantly. All NABE panelists again indicated business decisions are being made based on expectations for positive economic growth (as measured by real GDP) in 2010.
- Profit margins expanded for the third quarter in a row. Twenty-five percent (25%) of survey respondents reported increased profitability versus 11% that reported declines. Three of the four major sectors posted higher margins than in January. Slightly more firms than in the previous quarter (18% vs. 17%) cut prices than raised them.
- Job creation increased for the first time in the past two years of this NABE survey. The percentage of firms increasing payrolls rose to 22% from 13% in the January survey. The percentage of firms cutting jobs moved lower—from 28% in January to 13% in April. The share of respondents expecting their firms to add employees over the coming six months rose to 37%, up from 29% in the previous survey
- Credit conditions continue to hamper firms. Despite improvements throughout the economy, a large share of respondents continue to report that credit conditions had a negative impact on their businesses during the first quarter of 2010.
Its interesting that many people during the porkulus process said that we would be better off if we did nothing. Based on this poll of economists that is exactly what we did. We would have been much better off if some that $800+ trillion was spent on real tax cuts and the rest remained unspent as our deficit continues to grow.