WEST SPRINGFIELD, MA — Small economic growth will continue, according to a forecast presented at the Eastec show today.
“Growth will not be substantially higher than we’ve had in the recent past,” Patricia Buckley, managing director of economics for Deloitte Services LP, said at the keynote address for the show’s second day.
A growth rate of about 2% annually “is where we’re going to be,” she said. “Growth rates you’re seeing are what we’re projecting.”
The economy is being constrained by lackluster productivity increases, even smaller growth in major international regions including Europe and Japan as well as a strong dollar, Buckley said.
The US economy is approaching full employment, meaning future job growth will slow, Buckley said. Also, she said, businesses have cut back investment on equipment that could boost productivity. A strong dollar makes goods produced in the US more expensive in other markets, holding down exports.
What’s more, policy proposals by President Donald Trump face an uncertain future, she said. Trump has called for regulatory reform, a revamped US tax system, including business tax cuts, and investment in roads, bridges and other infrastructure.
“Given what’s going on in Washington, a lot of this stuff is being slowed,” Buckley said.
Buckley didn’t specify those events. Trump is under fire for discharging FBI Director James Comey, whose former agency is investigating Russian activity in the 2016 election. The president is also being criticized for discussing classified information during a meeting with Russian officials, something he defended in a May 16 post on Twitter.
Buckley said US manufacturing activity has gained about 20% since the 2007-08 recession. Manufacturing employment, she said, has only recovered 8%. Manufacturing has become more efficient. New jobs in the sector generally require more skills to operate and program automated machines.
“How do you get the word out that manufacturing jobs are good jobs?” Buckley said. “Getting the right skills — it’s continuing to be a real challenge.”
Ending the North American Free Trade Agreement would slow the US economy, Buckley said. Trump wants to renegotiate the trade pact between the United States, Canada and Mexico.
“Benefits from trade are very diverse,” she said, while “pain from trade is very specific,” including closed plants and job cuts.