Written by Gordon Webster, Jr.
Business forecasting firm Kiplinger has released its latest look ahead at the economy to give business owners a chance to think out their budgets for 2019.
Here are some of the highlights:
Economic expansion is expected to cool slightly , though GDP will still grow on par with this year’s nearly 3 percent gain. Import tariffs are expected to raise costs for some businesses, and other countries’ tariffs may hurt exports. Consumer spending on services is expected to drive GDP growth, while a pullback on auto purchases is expected.
The cost of borrowing will edge up as the Federal Reserve hikes interest rates twice this fall and three times next year. By the end of 2019, the prime lending rate will hit 6.25 percent.
Business investment will be strong, with a projected 8-percent increase compared with 7 percent this year, though tariffs do remain a possible spoiler to that party.
Energy costs are expected to be somewhat higher next year, especially crude oil, gasoline and electricity. Natural gas prices are expected to remain stable.
Employer-sponsored health care is expected to increase by about 5 percent next year, and average pay for workers is expected to be up slightly to 3.3 percent next year.
And since we live in California, where suing employers ought to be the state sport, legal costs will rise 5 percent next year, with Kiplinger suggesting clients can negotiate those lower.