The majority of the U.S. businesses surveyed by the National Association for Business Economics (NABE) say they are pessimistic about the current economic conditions and expect the trend to continue in the future.

"Respondents to the October NABE Industry Survey were considerably more negative than they were in July, suggesting that the ongoing financial crisis is pulling down the overall economy," said Ken Simonson, chief economist for the Associated General Contractors of America.

The NABE notes that for the first time since 2001, firms reported more declines in demand than increases for goods and services. Demand for goods increased for 30% of the surveyed firms, while 35% of respondents reported falling demands.

"This is consistent with other evidence that the U.S. economy fell into a recession in the third quarter. Weakness was especially pronounced in the goods-producing sector, where only 6% of firms reported increased demand while 61% reported declining demand," read the report.

Of the 102 businesses surveyed, 38% expect that economic growth will slow in 2009, while 79% forecast GDP to come in under 1%.

The survey also pointed out that weakening U.S. market conditions and past commodity price increases have trimmed profit margins. Forty four percent of respondents reported falling profit margins, while 15% reported rising margins.

For the third consecutive quarter, the survey notes that capital spending fell lower, with only a few companies increasing capital spending.

By Steve Stecyk and edited by Sarah Sussman
©CEP News Ltd. 2008