Faster economic growth seen after slow first quarter
The anemic growth seen in the first three months of this year is not expected to set the pace for the U.S. economy for the entire year.
That was one of the insights that attendees picked up Thursday at the 11th annual ProcureCon conference held at the Crowne Plaza hotel in Richmond.
The two-day conference sponsored by the Virginia Asian Chamber of Commerce is designed to expose small-business owners to a wide variety of opportunities.
During the rest of this year, those business owners will face a national economy that looks very much like 2014, according to Sonya Ravindranath Waddell, regional economist with the Federal Reserve Bank of Richmond.
The nation’s gross domestic product grew by only 0.2 percent during the first quarter, but Waddell noted that economy activity during those three months was hampered by severe winter weather.
The first quarter of 2014 also was slow because of bad weather, she noted, but the overall growth rate for the year was 2.4 percent. The Fed expects similar results by the end of this year, with a forecast of 2 to 2.5 percent growth, Waddell said.
The current U.S. economy has some strengths but still faces a number of weaknesses. Waddell said strengths include rising consumer spending and business investment. The weaknesses are residential construction, which has not returned to prerecession levels, and federal government spending, which has fallen 3 percent annually for the past four years.
One opportunity for Virginia small-business owners may come from Japanese companies operating in the United States.
Shiro Akayama, executive director of research and planning for the Japan External Trade Organization in New York, says a growing number of Japanese company affiliates in the U.S. intend to increase their purchases of raw materials and components from American businesses.
Akayama said these companies already buy more than half of their supplies from U.S. companies. He said Japanese affiliates in the U.S. employ 700,000 workers, including 14,000 in Virginia.