A UBS survey of US businesses showed that the trade war is likely to impact business owners’ growth plans if it continues to rage on.
The September survey showed a shift in sentiment from business owners. They’re more cautious about the economy going forward, and less patient about trade progress from the administration.
Business hiring and spending on growth are important pillars of the US economy. A reversal in hiring and spending from businesses could lead to an economic contraction.
on Markets Insider.
The trade war is taking a toll on US businesses, and some are now pulling back on investing and hiring, according to a new survey from UBS.
Since June, the percent of businesses that say they plan to boost hiring has fallen to 25% from 46%, while companies planning to increase investments have fallen to 24% from 36%, according to the September survey.
If the trade war continues, it would have an even greater impact on hiring and investment, the survey found Just 13% of businesses said that they would increase hiring, while only 11% said that they plan to increase business investment.
This survey showed a shift in business-owner sentiment, as it was the first time owners have talked about potentially cutting back on hiring, said Mike Ryan, chief investment officer of UBS Global Wealth Management in the Americas.
“They’re more concerned and cautious,” Ryan told Markets Insider in an interview. “I think we’re starting to reach that inflection point for business owners that you have to take seriously.”
UBS surveyed 500 business owners with at least $250,000 in annual revenue and one employee from August 28 until September 3 for the report.
Healthy businesses are important to the US economy
How much the trade war has hurt US businesses, workers, and consumers is constantly up for debate. President Trump has said many times — on Twitter— that the trade war is only hurting China. But customs data shows that trade from both China and the US had decreased.
In the latest survey, 67% of UBS business owners said the trade war is having a negative impact on the US economy and the global economy and 24% said the impact was negative on their business as well.
The health of US business is an important economic indicator. When businesses are healthy, they hire more people and spend money expanding, which boosts the US consumer and helps the economy grow. But, if businesses are spooked enough to stop hiring and spending, it could quickly lead to an economic contraction.
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There are already signals that may be happening. On Tuesday, the National Federation of Independent Business showed optimism among small businesses hit a five-month low in August. In the same month, companies in the US slashed more than 10,000 jobs …read more
Source:: Businessinsider – Politics