Business economists gloomier about US economy: NABE

WASHINGTON (AFP) - Leading business economists are growing more pessimistic about the health of the US economy, but are more upbeat about their own company's prospects, according to a survey released Tuesday.

The National Association for Business Economists (NABE) panel predicted a sharply lower pace of gross domestic product (GDP) growth in the first half of the year, a quarterly survey showed.

Twenty-four percent of the panelists said they expected GDP to grow by an annualized rate above 2.0 percent in the first half, compared with 66 percent forecasting growth between zero and 2.0 percent.

One in 10 of the panelists said they expected GDP to decline in the first six months.

"This is a much gloomier outlook than respondents reported in previous surveys regarding either the first or second half of 2007," the NABE said in a statement.

In the October survey, 47 percent forecast growth in the 2007 second half of between 2.0 and 4.0 percent, and only 1.0 percent saw it declining.

"The January NABE Industry Survey shows a striking dichotomy," said Ken Simonson, chief economist at Associated General Contractors of America.

"Compared to the October survey, respondents are much gloomier about the outlook for the economy as a whole but are more upbeat about their own firms' pricing, capital spending, and hiring plans."

Despite a severe housing slump and tight credit that are leading some analysts to warn of recession, the survey found that 42 percent of firms plan to create more jobs in the first half, while only 17 percent will cut jobs.

The hiring outlook was more positive than in the previous four quarters, and "an encouraging sign for an economy at risk," the NABE said.

In the October survey, only 32 percent of respondents had planned to increase payrolls, down a notch from the 33 percent seen in the January 2007 poll.

Panelists raised their capital spending plans for 2008. Fifty percent said they expected to increase spending, up from 43 percent in the October survey.

Expectations of price increases in the first quarter jumped, with 47 percent planning to hike prices, compared with 33 percent in October.

While nearly all respondents expected the housing slowdown to continue -- and nearly half saw a further "substantial" downturn -- fewer than in October expect their business to be affected.

The survey of 98 NABE members was conducted between December 13 and January 9.