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Economists upbeat about growth prospects

Despite uncertainty in Washington and rising oil prices and interest rates, companies are upbeat on the prospects for economic growth in the next year, according to a quarterly survey of business economists.

But economists surveyed by the National Association for Business Economics weren't as optimistic about hiring, according to the survey released Monday. Only 27 percent reported rising employment at their firms from July through September, down from 29 percent in the second quarter. And 37 percent expected their companies to expand payrolls in the next six months, down from 39 percent in the second quarter.

The slower hiring occurred even as sales and profit margins grew during the third quarter, according to the survey.

Still, optimism about future economic growth remained strong last quarter. Almost 70 percent of the economists in the survey predicted gross domestic product growth of 2 to 3 percent, with 19 percent more expecting growth of 1 to 2 percent. The figures are nearly identical to those from the second-quarter survey, released in July.

Among the survey's findings:

• Sales growth accelerated in the third quarter. Forty-two percent of the economists reported rising sales at their companies, up from 35 percent in July. Only 12 percent reported falling sales, down from 15 percent in July.

• Profit margins also rebounded. One-third of the economists said margins were up at their firms, up from 21 percent in July and the highest percentage in more than a year. Those reporting falling profit margins fell to 19 percent, down from 25 percent in the second quarter.

• Only 16 percent of economists said their firms were raising wages and salaries, down from 19 percent in July and 31 percent in April.

• Most economists, 81 percent, said the Affordable Care Act had no impact on employment during the past three months. But a "sizable minority," 18 percent, reported a negative impact. And 22 percent expected a negative impact on employment in the next year, compared with only 2 percent expecting a positive impact.

• Most economists, 80 percent, reported no impact on their businesses in the third quarter from rising long-term interest rates. But a quarter of the economists expect rising interest rates and increasing oil prices to drag on sales during the next 12 months.

Economists upbeat about growth prospects 10/21/13 [Last modified: Monday, October 21, 2013 10:11pm]
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