The income tax break engineered by President Donald Trump last year hasn’t prompted much expansion of business and hiring, a new poll says.
The National Association of Business Economics’ quarterly business conditions poll says 84 percent of respondents said they had not changed plans for business investment.
Fewer firms increased capital spending compared to the October survey responses, but the cutback appeared to be concentrated more in structures than in information and communication technology investments, according to a press release accompanying the survey, which also showed that while most respondents don’t see a recession within the next year, they also don’t see much business growth.
NABE President Kevin Swift writes:
The goods-producing sector, however, has borne the greatest impact, with most respondents in that sector noting accelerated investments at their firms, and some reporting redirected hiring and investments to the U.S.
Seventy-seven percent of respondents indicate that trade concerns have not caused their firms to change investment, hiring, and pricing plans, a result similar to that in the previous survey .
But, a larger share of panelists from the goods-producing sector compared to those from other sectors reports that adjustments are being made at their firms, with higher selling prices and delayed investments cited as the most prevalent changes.
The quarterly survey said businesses were replacing equipment rather than expanding.
It also noted that a larger percentage of respondents said they’re having a hard time finding skilled workers. It mostly affects “high skilled” positions. Few reported having trouble filling the “low skilled ” positions although it didn’t define the terms.
The tax bill, which took effect a year ago, reduced the corporate tax rate to 21 percent from 35 percent, in the belief it would stimulate business spending and job growth.