Editors Note: An Economy Stuck in Neutral
Fall 2012
With home and stock prices rising, consumer confidence is up, but consumer spending is down as Americans reduce their debt and remain cautious. Companies are letting go of fewer people, but they aren't hiring, and many of the unemployed have simply given up looking for work.
Only 29 percent of chief executives at large U.S. companies plan to increase hiring over the next six months, according to a late September Business Roundtable survey - down from 52 percent who said they would increase hiring when polled in early 2011. Only 30 percent expect to increase their investment in capital goods such as machinery, computers, and other equipment. Overall, the CEO outlook index fell to 66, which is the lowest reading since the third quarter of 2009 when the recession officially ended. The CEOs polled by the Business Roundtable are worried about the impact of budget cuts and tax increases that are set to take effect in early 2013 - referred to as "the fiscal cliff" - which they believe could drive the economy back into recession.
Executives recently surveyed by the National Association of Manufacturers (NAM) and the National Federal of Independent Business (NFIB) share their concerns: 55 percent say the national economy is in a worse position today than it was three years ago. More than two-thirds feel there's too much uncertainty in the market to expand or hire, and they further believe that the Obama administration's regulatory policies have hurt U.S. manufacturers and small businesses.
So what's the solution to getting the U.S. economy growing again? Many economists believe the answer is increased consumer spending, which accounts for about 70 percent of GDP. If tax rates are lowered, consumers will have more money to spend, private-sector revenue will increase, and businesses will begin to also invest and hire, reducing unemployment and fostering a cycle of growth. The November elections will tell us whether Americans have listened to these economic arguments - or not.
Project Announcements
PEAK Precision Manufacturing Plans Bowling Green, Kentucky, Operations
07/26/2024
Italy-Based Sipcam Agro USA Upgrades Wayne County, Mississippi, Operations
07/26/2024
Cleveland-Cliffs Plans Weirton, West Virginia, Operations
07/26/2024
IDEXX Laboratories Plans Wilson, North Carolina, Production Operations
07/26/2024
Germany-Based Ritz Instrument Transformers Plans Waynesboro, Georgia, Operations
07/26/2024
AirJoule Plans Newark-Wilmington, Delaware, Operations
07/26/2024
Most Read
-
19th Annual Area Development Gold and Silver Shovel Awards
Q2 2024
-
2023's Leading Metro Locations: Hotspots of Economic Growth
Q4 2023
-
2023 Top States for Doing Business Meet the Needs of Site Selectors
Q3 2023
-
The CHIPS and Science Act will bring jobs back to the United States
Q2 2024
-
2023 Top States Commentary: Top-Ranked States Have What It Takes to Win Mega Projects
Q3 2023
-
The Bring Your Own Energy (BYOE) Party Is Starting
Q2 2024
-
Midwest becomes hotspot for semiconductor manufacturing and supply industries
Q2 2024