Economic Outlook

Improvement/Stability Expected

While the vast majority of firms expect either stability or improvement in the U.S. economy in 2018, the percentage expecting further gains remains notably up from 2016 (55% vs. 41%) and near the highest level of optimism since recovery from the Great Recession began. The vast majority of firms expect improvement in their company’s overall financial performance this year, similar to post-recession levels, and nearly all anticipate improvement or stability.

Expectations for further improvement in the U.S. real estate market fall lower compared to last year (45% vs. 55%), indicating a possible softening. Interest rates have been on the rise and, after roughly five years of recovery from the Great Recession, housing costs overall are definitely trending higher. While worsening conditions are not expected, there appears to be a recognition that this area may see less growth and more stability during 2018.

  • Across company size, nearly two-thirds or more of firms anticipate better performances in 2018. Around half of firms across size expect improvements in both developed, global-market economies and the U.S. economy.
  • Roughly half of small and large firms expect improvement within emerging global markets, and mid-size organizations are the most optimistic (62%). However, expectations for the U.S. real estate market are more mixed: close to half of firms across size expect improvement, with expectations among small and large firms tilting slightly towards stability rather than further gains.

Overall, 2017 was a positive year with far more firms across size reporting better performances than stability or negative developments across firm performance, domestic and global economic zones, and the U.S. real estate market. Experiences line up with 2018 projections for: company performance (firms of all sizes); the U.S. economy, developed global economies, and the U.S. real estate market (small and mid-size firms); and emerging global market economies (mid-size firms).

Two-thirds or more of large firms last year reported improvements across domestic and global economic zones and in the U.S. real estate market. However, they do not view 2018 with similar levels of optimism. Just over half expect further improvements in domestic and global economic zones, and only 43% anticipate improvement in real estate. Small firms also see a tapering off of 2017’s reported betterment in emerging global markets (58%) with less optimism for 2018 (49%). Very few expect negative developments; the trend is one of stability or improvement, with growth occurring a bit slower as changes in law, interest rates, and other factors are managed.

 
Question 15-1
Rating of company's overall financial performance in 2017
Chart Q15
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Question 15-2
Rating of emerging global market economies in 2017
Chart Q15-2
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Question 15-3
Rating of developed global market economies in 2017
Chart Q15-3
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Question 15-4
Rating of U.S. economy in 2017
Chart Q15-4
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Question 15-5
Rating of U.S. real estate market in 2017
Chart Q15-5
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Question 16-1
Anticipated overall financial performance of company in 2018
Chart Q16
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Question 16-2
Anticipated emerging global market economies in 2018
Chart Q16-2
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Question 16-3
Anticipated developed global market economies in 2018
Chart Q16-3
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Question 16-4
Anticipated U.S. economy in 2018
Chart Q16-4
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Question 16-5
Anticipated U.S. real estate market in 2018
Chart Q16-5
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