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Recognized Supplier Guide '19

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164 • RV PRO • January 2019 rv-pro.com B U S I N E S S B usinesses should enjoy brisk economic tail winds in 2019, according to economic experts, who say corporate profits will continue to rise at a nice pace, and the improving job market will inspire consumers to spend freely. It should all translate into a healthy operating environment for the coming 12 months, although economists are starting to see early signs of an even- tual slowdown. "The business cycle has entered its boom phase," says Sophia Koropeckyj, managing director of Industry Economics at Moody's Analytics, a research firm based in West Chester, Pa. The nation's total revenues from goods and services – or the gross national product (GNP), the most commonly accepted measure of economic growth – is expected to grow at a 2.7 percent clip in 2019. Despite the generally sunny outlook, the GNP forecast represents a modest deceleration from the 3.0 percent increase expected when 2018 numbers are finally tallied. Why? "There are several reasons for slower growth in 2019," says Scott Hoyt, senior director of consumer economics for Moody's Analytics. "The largest is that deficit-financed tax cuts at the start of 2018 lifted growth. No such support, in terms of an additional increase in after-tax income, is expected in 2019. In addition, job growth will be slower because of there being fewer available workers." Finally, Hoyt notes that interest rates will likely be higher, a factor that can have a softening effect on business investments. Profits Grow Going into 2019, business owners possess a lot of optimism. That's fueled by healthy corporate profits, which are expected to rise by 3.7 percent in 2019, according to Moody's. "We expect corporate profits to ben- efit from the tax reform, mainly through the lower top tax rate and the new equip- ment accelerated expensing provision," says Koropeckyj. "Another positive to corporate profits is the rollback of Dodd-Frank Act provisions, which had increased costs for businesses." The anticipated level of business growth actually represents a deceler- ation from the 6.9 percent increase expected when 2018 numbers are tallied, a moderation largely due to an anticipated rise in labor costs and higher interest rates. Reports from the field corroborate Moody's readings. " O u r m e m b e r c o m p a n i e s a r e reporting significant upticks in busi- ness growth, and most are anticipating a healthy 2019," says Tom Palisin, exec- utive director of The Manufacturers' Association, a York, Pa.,-based regional employers' group with more than 370 member companies. "There is so much demand they can't keep up. Lead time has extended appreciably, from a couple of months a few years ago to three to six months today." Business optimism rests atop a firm Forecast 2019 Economic experts expect a growing economy will continue to support healthy profit and further employee wage hikes. At the same time, economists are starting to see early signs of an eventual correction. By Phillip M. Perry

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