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NABE Survey Shows Expectations of Steady Growth, Pullback on Capex Spending

July 20, 2015, 07:03 AM
Filed Under: Economic Commentary

U.S. businesses' outlook on sales in the coming months has darkened after sales growth slowed in the second quarter, according to a survey released today by the National Association for Business Economics as reported by the Associated Press.

More companies also expect to cut back on their investment in equipment and buildings in the July-September quarter, the survey found. However, hiring and wage and salary increases are likely to continue at about the same pace in the third quarter as they did in the previous three months. The overall survey results portray an economy muddling along at a steady, if tepid, pace, an article by the Associated Press notes.

Fifty-nine percent of businesses expect their sales to grow in the next three months, down from the 71 percent who forecast sales growth three months ago from the 68 percent who projected growth in January.

Only 46 percent of firms said their sales rose in the April-June quarter, down from 49 percent in the first quarter and 54 percent in the final three months of last year. And 18 percent said sales fell, the most in more than a year.

Weaker sales are likely a reason some firms are spending less on large equipment, said the Associated Press write up. Twelve percent of companies reduced their capital spending in the second quarter, roughly double the total in each of the previous four quarters.

Much of that cutback occurred in manufacturing, the survey found, where companies have been hit by a strong dollar. The dollar has risen about 14 percent in the past year against a basket of currencies making U.S. goods more expensive overseas.

The NABE's survey is based on responses from 112 member companies, about half of whom have more than 1,000 employees. The survey was conducted from June 17 to July 1.

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