A majority of Japanese firms are upbeat about the outlook for the U.S. economy, a Reuters poll found, a reassuring sign after some market concern earlier this year that the pace of US growth could be slowing.
Most also had a generally positive outlook for China’s economy even if the number of companies somewhat pessimistic about prospects was higher than for the US economy.
The Reuters Corporate survey showed 64% of Japanese companies thought the US economy would keep growing at around its current pace while another 19% saw it expanding further. Just 17% saw growth peaking out or slowing.
“Given its strong fundamentals, and just looking at economic factors, the US economy should continue to expand,” a manager at an electrical machinery maker wrote.
But like many other respondents, the manager also expressed concern about how well US President Donald Trump’s administration would handle key policy issues.
The survey was conducted Aug. 30-Sept. 12, during which US second-quarter GDP was revised higher on robust consumer spending and strong business investment. Hurricane Harvey slammed into Texas just before the poll while Hurricane Irma hit Florida at the tail end of the survey.
Prior to the survey, economists were paring their GDP forecasts but better economic indicators since then have led to upward revisions.
A Reuters September poll of nearly 100 economists showed they expect the US economy to expand at an annualised 2.6% in this quarter and 2.5% in the next, up from previous predictions in August of 2.5% and 2.4%.
In the Reuters Corporate survey, 59% of Japanese firms with direct or indirect dealings with US businesses, said that their business plans were on track. But 33% said there were signs of delays or stagnation while another 8% said they would have to review their business plans.
Analysts said, however, that it was hard to say if the number experiencing delays or problems was particularly high, and that this could just be many companies taking a cautious tone.
The survey, conducted for Reuters by Nikkei Research, polled 548 big and mid-sized firms that reply on condition of anonymity. Around 250 companies answered the questions on the outlook for the U.S. economy while around 150 replied to questions about business plans.
On China, 51% expected the economy to grow at roughly its current pace and another 14% predicted growth would accelerate. But some 35% saw it peaking out or slowing.
Many respondents were worried about a potential slowdown after the Communist Party’s autumn congress starting October 18, at which President Xi Jinping is expected to tighten his grip on power.
“The focus is the autumn congress. China’s underlying economy is performing more than expected thanks to government investment as the administration tries to sail through the congress,” said a manager of another electrical machinery maker.
“The situation may change all at once after the congress, and it’s fully thinkable the economy could decelerate.”
China’s economy expanded at a faster-than-expected 6.9% year-on-year in April-June , setting the country on course to comfortably meet its 2017 growth target of around 6.5%.
However, China’s fixed-asset investment, factory output and retail sales all grew less than expected, data showed last week, reinforcing views that the world’s second-largest economy is gradually beginning to lose steam in the face of rising borrowing costs.