What’s the Economic Outlook for 2012 and Beyond?

By Rieva Lesonsky

Wouldn’t it be nice if small business owners could feel some sense of certainty about the U.S. economy going forward? It would, but according to some of the nation’s top economic bloggers, the current uncertainty is going to continue. In fact, “uncertainty” might be the best we can hope for, because in The Kauffman Economic Outlook: A Quarterly Survey of Leading Economic Bloggers, Third Quarter 2011, bloggers expressed the most pessimistic view of the economy so far this year.

The quarterly survey polls top economics bloggers on current, short-term and longer-term economic conditions. In the most recent survey, 55 percent of respondents described the economy as “mixed,” while 33 percent think it is “facing recession.” Bloggers were also asked to choose from a long list of adjectives to describe the economy. The top choice? “Uncertain,” with “weak,” “fragile” and “vulnerable” also in the top five.

Does the picture get better as we look further ahead? Not really: Asked to look out three years into the future, over 60 percent of bloggers polled said they predict that both interest rates and inflation will increase or increase strongly. Only half of bloggers think that employment will grow in the next three years.

50 percent of respondents anticipate employment growth, a substantial drop from the 70 percent who expected employment growth in the second-quarter survey.

What about business in general? Conditions for business were rated “fair, bad or very bad” by over two-thirds of respondents. When it comes to financing for businesses, bloggers felt conditions are best in venture capital and angel capital, while bank lending was rated the worst.

On the plus side, almost half of respondents (44 percent) think that U.S. economic growth will reach a steady 2 percent annual rate. How could government help? The number-one recommendation among the bloggers was that government should cut regulation and fees that hinder formation of new businesses; 88 percent of respondents supported this idea.

Last, but not least, bloggers were polled about some predictions for the coming year. Thirty-five percent said the U.S. will enter a double-dip recession in 2012; 56 percent said they think President Obama will be re-elected; and just 21 percent think the U.S. unemployment rate will drop below 7 percent.

What do you think? Is your outlook for 2012 and beyond more, or less, negative than that of the Kauffman Economic Outlook bloggers?

Image by Flickr user Anderson Smith 2010 (Creative Commons)

This entry was posted on Monday, December 5th, 2011 at 6:00 am and is filed under Small Business, small business. You can follow any responses to this entry through the RSS 2.0 feed.


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