The expectation for the U.S. economy’s growth prospects for the year ahead continues to improve.
More than 70 percent now forecast gross domestic product (GDP) to advance at a pace of more than 2 percent over the next four quarters, up from the 65 percent in the April survey and the 50 percent in January.
The latest figure is nearly double what respondents reported in October.
Still, the majority view, held by 70 percent of respondents, remains that the economy will advance at a restrained pace of between 2 and 3 percent.
The first six months of the year have been fraught with concern about the effects of tax increases and across-the-board spending cuts on growth.
But the effects have been less than expected and 74 percent of panelists indicated no negative impact on their firms’ sales from tax increases or sequestration in the last three months, down from the 79 percent that reported no impact in the April survey.
But 26 percent reported a negative impact, up from 16 percent in April.
While tax increases and spending cuts appear to have had less impact on firms’ employment and capital spending decisions than on their sales, the prevalence of any negative impact has nevertheless grown since April. Nearly nine out of 10 panelists — 89 percent — reported no impact on their firms’ payroll in the second quarter of 2013, but that is a decline from the 93 percent in the April survey.
The report also showed:
• Top concerns are the state of the global economy (29 percent), the regulatory environment (20 percent) and further government spending cuts and rising interest rates (both at 14 percent).
• The greatest concern over the next 12 months — 32 percent said global economic conditions, rising interest rates (17 percent), the regulatory environment (14 percent) and further government spending cuts (11 percent).
• Sales slowed with as about 35 percent reported rising sales at their firms, down from 55 percent in April and only slightly below percentages seen the three previous quarters. Meanwhile, 15 percent of panelists reported falling sales, up from 9 percent in the previous survey but equal to the share reported in January.
• Profit margins eroded as the percentage of panelists reporting rising margins dropped to 21 percent in July from 29 percent in April.