Encore End of Year Economic Outlook

(Dallas, Texas) December 22, 2011 – While the economy is not firing on all cylinders, many economic indicators generally support expectations that the U.S. will avoid a recession and progress at a measured pace. However, domestic challenges, such as renewed foreclosure activity and high unemployment, global economic risks are dampening U.S. economic performance. The U.S. economy faces numerous challenges over the next several years including:

  • Debt-ceiling contention and credit downgrades impact global confidence with risks of increased taxes and further spending cuts that could derail the willingness of consumers and businesses to spend.
  • Potential for fallout from the Eurozone crisis manifesting in severe stock market volatility, uneven commodity prices and diminished investor confidence.
  • Consumer confidence is currently 64% below pre-recession peak as caution and uncertainties remain about job outlooks and prospects for real wage growth.
  • The residential sector remains vulnerable as foreclosures and short sales comprise 30% of home sales transactions and median sale price declined 3.9% over the past year.

In spite of these challenges, business investment is expected to help propel the economy in 2012. Encouraging signs continue to emerge as corporate profits increased by an annualized rate of 8.5% and worker productivity is 8.0% higher than pre-recession levels. The private sector added 1.82 million jobs in the last 12 months as of October 2011 and the breadth of hiring over the last 3 months indicates that the recovery, though slow, has been widespread. Hiring was led by business and professional services, healthcare, manufacturing and the construction sectors. In perspective, 24% of the 8.7 million jobs lost during the recession have been restored.

The economy is forecast to add 1.7 million jobs by year end 2011, with the unemployment rate remaining stable near 9 percent. GDP is forecast to average 1.8% in 2011 before trending upward in 2012 but sub-par employment growth is likely as long as the GDP struggles to surpass its historical average annual growth rate of 2.5%. Growing consumer demand and business investment, enhanced credit availability, rising exports, and healthy corporate profits are expected to pave the way for stronger economic recovery over the next year.

About Encore Enterprises, Inc. Encore Enterprises, Inc., is a diversified commercial real estate firm in Dallas, Texas, that is active in the hospitality, retail, multifamily and commercial office space sectors. Since the company’s formation in 1999, Encore Enterprises has completed over $1 billion of acquisitions, developments and complex financial transactions with a focus on the Southern, Eastern and Midwestern United States.  For more information about Encore Enterprises, Inc., visit www.encore.bz or call (214) 259-7000.

2017-02-03T11:27:18+00:00