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US companies see year-long contraction: survey

US companies, suffering the worst business conditions in 26 years, expect the economy to contract by at least 1.0 per cent this year, a survey of business economists showed.

business Updated: Jan 26, 2009 21:46 IST

US companies, suffering the worst business conditions in 26 years, expect the economy to contract by at least 1.0 per cent this year, a survey of business economists showed on Monday.

The National Association for Business Economics (NABE) said its quarterly survey of private sector firms found a bleaker view on the macroeconomic outlook compared with the third-quarter survey in October.

A whopping 78 per cent of respondents expected US gross domestic product (GDP), the broad measure of economic activity, to be lower in 2009 than in 2008.

A majority 52 per cent of those expecting the economy to shrink saw a contraction of at least 1.0 per cent this year, while 26 percent predicted a range of zero to negative 1.0 per cent GDP.

That compared with the October survey in which 38 per cent predicted the economy would contract in 2009 by less than 1.0 per cent.

Only 3.0 per cent of respondents in the current survey thought GDP would grow at least 1.0 per cent, compared with 21 per cent in the prior survey.

NABE said 105 panelists participated in the survey that reflects fourth-quarter 2008 financial results and the near-term outlook. It was conducted between December 17 and January 8.

"NABE's January 2009 Industry Survey depicts the worst business conditions since the survey began in 1982, confirming that the US recession deepened in the fourth quarter of 2008," said Sara Johnson, an analyst at IHS Global Insight.