Service firms in the metropolitan area and factories across the state are bullish about the economy despite stock market jitters and concerns over a trade war between the United States and much of the world, according to two recent polls.
The Federal Reserve Bank of New York found service firms on Long Island, in New York City and the northern suburbs expect their sales to increase 5 percent, on average, this year compared with 2017. That’s up from a year ago, when service firms predicted a 3 percent sales gain over 2016.
Similarly, manufacturers in the state forecast a sales increase of 6.5 percent on average this year compared with 2017. A year ago they predicted a 5 percent gain from 2016.
The New York Fed surveyed about 100 retailers and other service firms in the metropolitan area earlier this month. It also separately surveyed about 100 manufacturers across the state.
The polls, which were released Monday, coincided with growing concerns on Wall Street and elsewhere that higher U.S. import taxes will ignite a trade war with China and U.S. allies such as Canada and Europe.
In March, the Trump administration began imposing higher taxes – known as tariffs – on foreign-made steel and aluminum of 25 percent and 10 percent, respectively. Last week, the administration increased to 25 percent the tariff on $50 billion worth of Chinese goods.
Still, earlier this month the service firms told the New York Fed their workforces would increase 3 percent, on average, this year compared with 2017. Manufacturers predicted a 2 percent rise. A year ago service firms forecast a 1 percent increase, while manufacturers forecast flat employment.
In terms of capital spending this year, the bank said, “gains were anticipated: The median projected increase was 5 percent among manufacturers and 3 percent among service firms" compared with last year.