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/ Source: Reuters
Trump's $ 1
The quarterly National Association of Business Economics survey released on Monday found some companies said they were accelerating their investments due to lower corporate taxes. 84 percent of respondents said they had not changed their plans. Compared with 81 percent in the last survey published in October.
The White House had predicted that the massive stimulus package, marked by the reduction in corporate tax rates from 35 percent to 21 percent, would increase business spending and employment growth. The tax cuts came into force in January 2018.
"A large majority of respondents (84 percent) say that corporate tax reform a year after their adoption did not cause their companies to change their hiring or investment plans," said NABE President Kevin Swift.
The lower tax rates, however, had an impact on the goods-producing sector: 50 percent of respondents in this sector reported increased investment in their companies, and 20 percent said they had diverted the hiring and investment to the United States abroad.
The NABE survey also indicated a further slowdown in business spending after slipping sharply in the third quarter of 2018. The measure of investment in the survey fell in January to its lowest level since July 2017. Investment expectations for the next three months also weakened.
"Fewer companies increased their investment compared to the answers from the October survey, but mining seemed to focus more on the structure than investment in information and communication technology," said Swift, who is also chief economist at the American Chemistry Council is.
According to the survey, employment growth improved slightly in the fourth quarter of 2018 compared to the third quarter. Just over a third of respondents said employment in their companies had increased in the last three months (31 percent in the October survey). The survey's predictive employment numbers dropped from 25 in January to 25 in January.