Moderate Growth for Business Spending in 2017

Moderate Growth for Business Spending in 2017


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Moderate Growth for Business Spending in 2017
By:
02 Dec 2016
Business

The worst of the energy price bust is now over, so there is reason to anticipate some pickup in spending on equipment for oil and gas exploration. And manufacturers have had time to adjust to the drag from the strong dollar that hit export orders hard in early 2016. It’s still a struggle, though, because the greenback is showing renewed strength against major trade partners’ currencies, including the euro, the Japanese yen and Canada’s loonie. The positive news is that overall economic activity is firming up in the closing months of the year. More investment spending by businesses helped push third-quarter GDP growth to a 2.9% annual pace, the strongest quarterly growth in two years.

Manufacturing isn’t booming. But it’s not slipping into recession, as some had feared earlier in the year. U.S. factories are dealing with headwinds: Growth in Asian markets, especially China, is slowing. It’s still unclear how severely the Brexit vote will hurt Europe’s economy, and expansion in Britain is falling abruptly, likely to less than 1% in 2017. The incoming Trump administration’s intentions are still a wild card for America’s trade partners. The tone struck so far by President-elect Trump implies a tough line with other nations that may cause businesses to hold back on some spending decisions until there is more clarity about future policies on trade, taxes and investment incentives.


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Rahul Raj

Rahul Raj

This lazy StoryTeller forgot to write something about itself.


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