U. S. business conditions took a sharp downturn in the third quarter and the near-term outlook is even more gloomy, according to a quarterly survey conducted by the National Association for Business Economics.
For the first time since 2001, more respondents pointed to declines rather than growth in demand for their firms’ goods and services. That measure has been a reliable indicator of a looming recession since 1982.
“The survey’s measure of demand growth fell by the largest amount in the history of the survey,” Ken Simonson, chief economist at the Associated General Contractors of America, said in summarizing the results compared to the previous survey in July.
Some 90 per cent of panelists said their outlook for 2009 growth had slipped since July, and falling profit margins outpaced rising margins by three to one, the worst reading since 1982.
Although commodity prices peaked in early July, the lingering impact of past increases continued to squeeze profit margins, with 44 per cent of respondents reporting falling profit margins.