Most of the 149 Ninth District business leaders responding to the
November business poll are less optimistic about the national economy
than they were last year and expect slightly higher inflation. Business
leaders also indicated some concern for their community's economy
and their own business operations.
Business leaders expect slower growth and higher inflation in
the national economy. Nearly half the poll respondents expect real
gross domestic product in 2001 to increase by 2 percent or less,
compared with over 80 percent of business leaders last year who
expected growth of 3 percent or more. In addition, nearly half of
survey respondents expect the consumer price index to be around
4 percent or higher compared with only 25 percent of last year's
Over a quarter of the business leaders are pessimistic about the
outlook for their community, almost twice as many as a year ago.
Respondents predict business investment and employment to grow,
but foresee consumer spending and housing starts to decrease. And
they expect wages in their community to creep up.
Nonetheless, business leaders expect to increase sales revenue
and add more employees. They also plan to make larger investments
in plant and equipment and charge higher prices for their goods
and services. Leaders expect a challenge to find workers and to
comply with government regulations, but less of a challenge to implement
new technology and secure nonlabor inputs.
Respondents reported increased productivity at their companies.
Over 25 percent had productivity gains of 3 percent to 5 percent,
while 17 percent noted productivity gains of over 5 percent. The
poll results mirrored national rates of productivity growth, which
increased 2.8 percent in the third quarter. Internet sales are also
creeping up. In this year's survey, 29 percent of the respondents
reported sales over the Internet compared with 21 percent of respondents
in last year's survey.