The phase one U.S.-China trade deal will have little to no impact on sales this year, according to 63% of companies who participated in the latest business conditions survey released today by the National Association for Business Economics.
Why it matters: President Trump has championed the agreement as a "sea change in international trade" and the deal's signing has helped power U.S. stock indexes to fresh record highs, but business owners and economists are less enthusiastic.
- Of those respondents who do expect an impact, views are equally split, with 15% anticipating a positive impact and 15% expecting a negative impact on their firms’ sales outlook.
Flashback: Last week, a "Reuters poll of more than 100 economists ... showed a significant pickup in the U.S. economy was not on the cards" as a result of the trade deal.
Between the lines: Just 8% of finance, insurance, and real estate businesses (FIRE) and 10% of those in transportation, utilities, information and communications (TUIC) expect a positive effect from the deal, while 30% of TUIC firms and 13% of FIRE firms see negative impacts.
- Conversely, more than 41% of goods-producing companies and 50% of TUIC companies say tariffs and the trade war had a negative effect on sales.
The big picture: Overall, the survey found businesses were more bullish about economic growth over the coming 12 months than they were in NABE's last outlook in October.
- Still, NABE Business Conditions Survey chair Megan Greene notes, “For the first time in a decade, there are as many respondents reporting decreases as increases in employment at their firms" over the last three months.
Of note: The Dec. 23–Jan. 8 survey includes responses of 97 NABE members.
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