Survey: 30 Percent of Economists Believe Economy Will Shrink by June

By JEANNINE AVERSA
AP Economics Writer

April 21, ABC News

Washington - The odds the country will fall into its first recession since 2001 are rising sharply.

Thirty percent of economists now believe the economy will shrink in the first half of this year, up from 10 percent who thought this in January, according to a survey being released Monday by the National Association for Business Economics, known by its acronym NABE.

"That's a striking difference," said Ken Simonson, chief economist for the Associated General Contractors of America and the NABE's point person on the survey. The tone of the overall survey, he said, was "extremely gloomy."

Under one rough rule, if the economy contracts for six straight months it would be considered in a recession. Many economist and the public believe we are in one. Even Federal Reserve Chairman Ben Bernanke recently acknowledged, for the first time, that a recession is possible.

Forecasters "were notably downbeat about their own companies and the overall economy," Simonson said.

The majority of forecasters polled — 51 percent — thought the economic growth during the first half of this year would clock in between zero and 1 percent, which would still mark a feeble showing. Sixteen percent pegged growth in the first half at between 1 and 2 percent, while only three percent put it at between 2 and 3 percent. No forecaster believed growth during this period would exceed 3 percent.

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photo: A worker welds a boom on a crane on the assembly line at the Terex Corporation plant, Friday, April 11, 2008, in Waverly, Iowa. Construction machinery makers like Terex Corp. are straining to keep up with foreign demand for equipment used on infrastructure development projects. (AP Photo/Charlie Neibergall)