Economist says US economy is improving
WINSTON-SALEM, N.C. — The economy isn’t as bad as some people might think, despite a slow recovery after the recession, a national economist said Tuesday.
“This will be the best year for economic growth since 2005,” Lawrence Chimerine said during the Winston-Salem Chamber of Commerce’s 2014 State of the Economy Luncheon.
He spoke before a group of about 500 at the Benton Convention Center. The event was held in conjunction with the Winston-Salem Rotary Club.
During his speech, Chimerine said that at least 15 factors are helping economic growth.
No. 1 on his list is housing — an industry that has finally worked its way out of an oversupply of inventory.
“Housing demand is up,” he said. “Mortgage rates are low. Prices are favorable.”
He also said that money for mortgages is still hard to get but is much easier to obtain than it was three or four years ago.
He said that state and local governments have experienced a rebound in the economy and are experiencing increased tax revenues. Some of them have stopped laying off workers and are starting to rehire teachers and other employees.
Chimerine doesn’t expect recent spending cuts put in place by the federal government to continue slowing economic growth because most of them have already happened.
He also said that some U.S. manufacturers that had outsourced production to foreign countries are now bringing some production back to the U.S.
“Economic conditions in Europe have improved, helping our exports,” Chimerine said.
Other factors he mentioned that are helping the economy grow include lower gas prices compared with a year ago, and increased hiring by some companies.
“Corporations have tons of cash and they are now starting to use it,” he said.
Chimerine also said that the combination of increased global competition and deregulation has transformed the U.S. economy and made it more competitive than in the past.
And that competition has significant implications how companies budget, plan and develop new strategies, he said.
“In virtually every single industry in the United States there are more competitors operating today, in most cases, by far than there were many years ago,” Chimerine said.
Despite his belief that the economy will grow this year, Chimerine had a warning for business owners.
“It doesn’t mean we can sit back and relax, in my opinion,” he said. “There are just too many companies out there that want to increase their share.”
Chimerine has worked as a consultant for Fortune 500 companies and provides commentary on economic issues for numerous television networks, including, CNBC and PBS.
Gayle Anderson, president and chief executive of the Winston-Salem Chamber of Commerce, said Chimerine’s views were welcome.
“I was happy that Dr. Chimerine was as optimistic as he was about the economy, after so many years of being in the doldrums,” she said of the economy.