Deere and Company’s chief economist Dr. J.B. Penn offered his predictions for the year ahead Tuesday evening. Penn’s economic outlook included both positives and negatives, with strong potential for global growth being slowed down by uncertainty in Washington.
The outlook came as the Dow rose to five-year highs, while gas prices continued to climb for the 32nd day. With mixed signs abounding, what do they all mean?
“My overall sense is that the positives outweigh the negatives. We’re seeing some strength now in the housing sector, housing starts in 2013 should be above last year, home prices are actually going to increase a bit this year, I think, as opposed to last year. All in all, I think we’re seeing some very positive indicators,” said Penn.
Penn, though, was quick to point out that it’s tough for business when politicians leave “no clear rules for the game.” Quad City business leaders agreed.
“I work with a lot of closely-held businesses, and business uncertainty is huge,” said Steve Sorensen of Strategy in Progress.
“We’ve been in growth mode for a few years, and we’d like to continue that, but with the debt ceiling, and the fiscal cliff that’s not yet settled, we’d like to understand what certainty is out there and what can we do,” added Aaron Tennant of Tennant Truck Lines.
Penn said there’s looming deadlines for Congress to pay down the debt and get spending under control. If no deal can be reached, local business could see a big impact.
“That would have a big, big impact. These things are negatives that need not be. We need to find a solution to those,” said Penn.
Penn predicts GDP growth around 2 percent for the year. Although that may be slow, it’s progress.
“2013 will be better, I believe, than 2012, and then I believe that if the politicians enact some kind of credible solution to our problem, then 2014 and 2015 should be even better,” said Penn.