Weak Ending to 2015 Should Be Followed By Better Growth in First Half of 2016 - IHS Global Forecast

IHS Gloval Insight says it expected and forecast weak fourth quarter growth, and that  this is likely not an early warning of something worse. The company expects real GDP growth to rebound to around 2.5% in the first half of 2016, as some the headwinds facing the economy ease.<

Here's a quick forecast for the overall U.S economy from Nariman Behravesh, chief economist, IHS Global Insight, Lexington, Mass:

"The weak growth in real GDP is temporary. There are three major drags on the economy: inventories, energy-sector capital spending, and net exports. The first two headwinds will diminish in the first half of this year. The inventory cycle is likely to ease by no later than the second quarter. The plunge in investment activity in the oil sector is also expected to lessen soon, as energy prices level off. On the other hand, the drag from net exports is predicted to continue through 2018.

"While the weaker fourth quarter growth in consumer spending is something to keep an eye on, IHS Global Insight expects that growth will rebound to at least 3.0% in the second half. Both employment growth and income growth are robust. Moreover, the sharp deceleration in nondurable spending is likely temporary. Finally, IHS Global Insight expects automotive sales to better in the first half of this year compared with December. IHS Global Insight predicts that the net effect of all these trends will result in real GDP growth of around 2.5% in the first half of 2016."

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish