NABE Outlook Survey - September 2017


NABE Panel Foresees Continuing GDP and Job Growth through 2018;
Majority Expects Passage of Tax Reform and Infrastructure Plans
by Next Year

The September 2017 NABE Outlook presents the consensus of macroeconomic forecasts from a panel of 47 professional forecasters (see last page for listing). The survey, covering the outlook for 2017 and 2018, was conducted between August 24 and September 7, 2017.* The NABE Outlook Survey originated in 1965 and is one of three surveys conducted by the National Association for Business Economics (NABE); the others are the NABE Business Conditions Survey and the NABE Economic Policy Survey. Founded in 1959, the National Association for Business Economics is the professional association for those who use economics in their work. NABE has over 2,500 members and 40 chapters nationwide. Timothy Gill, CBE, American Iron and Steel Institute (chair); Steve Cochrane, CBE, Moody’s Analytics; Gregory Daco, Oxford Economics; Keith Phillips, Federal Reserve Bank of Dallas; David Teolis, General Motors Company; and Richard Wobbekind, CBE, Leeds School of Business, University of Colorado/Boulder, conducted the analysis of survey responses for this report. The views expressed in this report are those of the panelists and do not necessarily represent the views of their affiliated companies or institutions. This report may be reproduced in whole or in part with appropriate citation to NABE.

*The survey was administered during the Hurricane Harvey and before the Hurricane Irma weather events.


SUMMARY: “Results from the NABE September 2017 Outlook Survey show panelists’ expectations for real gross domestic product growth (GDP) in 2017 and 2018 are unchanged from those in the June 2017 survey,” said NABE Vice President-Elect Kevin Swift, CBE, chief economist and managing director, American Chemistry Council. “Despite a healthy increase in economic activity since the first quarter of the year, the weak start to the year is expected to hold the average annual real GDP growth rate in 2017 to 2.2%. Real GDP growth is expected to accelerate to 2.4% in 2018. Expectations for nonfarm employment growth are also unchanged from June, and continue to call for a slight deceleration through 2018. However, the median forecast for the unemployment rate is slightly lower than that reported in the June survey, with unemployment expected to decline to an annual average rate of 4.4% in 2017 and to 4.2% in 2018, both below the actual 4.9% rate in 2016.

“Panelists trimmed their inflation outlooks, but the anticipated trajectory of Federal Reserve interest rate increases is in line with previous expectations,” continued Swift. “The median forecast calls for the midpoint of the federal funds target rate to increase 25 basis points by the end of 2017 and to increase another 75 basis points in 2018, bringing it to 2.125% by the end of next year.

“Panelists continue to expect action by Congress and the Trump administration on both tax reform and infrastructure spending before the end of 2018, although the majorities holding these views are smaller than in the June survey,” Swift added. “The panel is split as to whether renegotiation of NAFTA would be positive, negative or neutral for the U.S. economy. While more survey respondents believe the balance of risks to the economy is weighted to the downside than
the upside, a large majority of the panel views a near-term recession as highly unlikely.”



  • The median forecasts for average annual inflation-adjusted gross domestic product growth (real GDP growth) are 2.2% for 2017 and 2.4% for 2018—both unchanged from the June survey. On a fourth-quarter-to-fourth-quarter basis, real GDP growth is expected to be 2.3% in both 2017 and 2018. The median forecast for third-quarter 2017 real GDP growth is 2.8%, while that for fourth-quarter 2017 real GDP growth is 2.5%, higher than the respective 2.5% and 2.4% forecasts in the June survey.
    • On balance, panelists continue to expect action by Congress and the Trump administration on both tax reform and infrastructure spending before the end of 2018, although the majority shares holding these views are smaller than in the June survey. Seventy-three percent of panelists anticipate individual tax cuts will be enacted before the end of 2018, compared to the 83% in the June survey that anticipated such policy changes. An equal 73% anticipate corporate tax reform will be enacted before the end of 2018 versus the 79% in the June survey. Sixty-one percent expect an infrastructure spending plan will be enacted before the end of 2018, compared
    to the 83% who held this view in the June 2017 survey.
    • The median estimate of the impact of potential changes to federal fiscal policy on real GDP growth is0 in 2017 and positive 0.25 percentage points in 2018.
  • More than one-third of panelists (34%) believe the renegotiation of NAFTA will yield at least a marginal net benefit to the U.S. economy, compared to 27% who feel it will have a negative net impact, and 30% who expect no net impact.
  • Panelists continue to believe that a recession is unlikely in the next two years. The panel is unanimous in its view that the probability of recession during 2017 is 25% or less. Nearly three-quarters (74%) of panelists estimate a 25%-or-lower probability of a recession in 2018, with the remaining 26% of the panel estimating a 26%-to-50% probability.