PCA forecasts less growth in 2019 and 2020

The PCA’s overall projection for the US economy suggests that this slow will be a result of rising interest rates, the emergence of fiscal difficulties at the state level at a time of relative prosperity, and the aging of the recovery. The association has also forecast that the GDP growth rate will be 3.1% for 2018, 2.7% for 2019, and 2.2% for 2020. It is also expected that the current unemployment rate of less than 4% will trend down, intensifying labour shortages and leading to stronger wage gains.

“We are expecting relatively modest but sustained interest rate increases after 10 years of low and stable rates,” said Ed Sullivan, Senior Vice President and Chief Economist of the PCA. “The Federal Reserve’s actions will gradually slow the construction sector’s growth, due to, among other things, the higher mortgage rates for residential buildings and higher borrowing cost for nonresidential buildings.
“While the tax cuts passed at the end of 2017 have helped to boost the overall economy, the rising debt will frame the discussion of future federal public infrastructure spending. America’s economy is unquestionably strong and resilient. The real GDP growth is healthy, wage growth is up, and both the unemployment rate and consumer household debt are at near record lows. While interest rates are rising, they have not reached a threshold that would cause a significant adjustment to positive overall growth projections.”

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