It could be a banner year for businesses’ bottom lines and potential for growth in 2014, as bank economists say that superior financial data management among executives will help spur the economy forward.
According to the 13-member economic advisory committee of the American Bankers Association, inflation-adjusted gross domestic product is expected to grow by 3 percent in the U.S., up considerably from the 2.3 percent average rate that’s held since the recession officially ended in 2009. The highest uptick in GDP since the market downturn in 2007 was 2.8 percent, reached in 2010.
Christopher Low, chairman of the ABA’s economic advisory committee and noted financial expert, said that it’s with great confidence he can forecast 2014 as being among the best in recent memory from a standpoint of fiscal performance, particularly for buy-side financial institutions.
“This will be the strongest economic growth since the expansion began in 2009,” said Low. “[It’s] the committee’s strongest forecast since 2005. We expect faster growth in business investment and stronger job creation as the economy improves.”
The group stressed that in addition to business growth moving higher, the housing market and consumption rates will also head northward. And as this recovery takes hold, so too will business spending and exports, thanks to effective risk management.
Washington helping to revive business environment
To a certain extent, lawmakers in Washington are making it easier for businesses to thrive, Low contended.
“This year’s bipartisan budget deal will be extremely beneficial to the economy,” said Low. For the first time since 2009, businesses and consumers can plan with much less worry about disruptive policy battles.”
A legislative oversight issue that business executives protested is the Volcker rule, which places certain restrictions on what types of trading and investing can be done by banks. Though the ABA, along with most buy-side financial institutions, opposed the ruling, they did welcome the news that the Federal Reserve eased some provisions of the mandate.
“ABA commends the regulators’ speed and judiciousness in revisiting the impact of the Volcker Rule,” said Frank Keating, CEO and president of the ABA. “Their action today should allow banks to avoid taking millions of dollars in unexpected and unnecessary write down.”
He added that the actions taken by regulators will help businesses compete more effectively by not having to devote as many resources to ensuring compliance.