InvestNow News 2nd August – AMP Capital – Quarterly Strategic Outlook – July 2019

30thJuly 2019 – Bevan Graham, NZ Managing Director & Chief Economist

Executive summary

Rising protectionism remains the greatest challenge to global growth. Trade policy and the uncertainty related to what happens next is dampening business confidence and new business investment, while the disruption to global supply chains makes for a challenging environment for global industrial production.

It’s not all bad, however. In the key developed economies of the US and Europe, tight labour markets are helping support labour income and household consumption, though the strength in this part of the economy is insufficient to offset the weakness in the goods-producing sectors. Among the challenging growth environment and high uncertainty we expect the US Federal Reserve and the European Central Bank to adopt easier monetary policy settings over the next few months.

At 121 months, the United States is now in its longest uninterrupted economic expansion. While the economy is now past the peak in the cycle, the economic expansion is expected to persist, albeit at a more moderate pace. Consumption is expected to be the key engine of continued demand growth. Offsetting this is the waning impact of fiscal stimulus and the uncertainty related to trade policy and the disruption to global supply chains from rising tariffs.

Read the full report from Bevan here >