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Recently The Conference Board has discussed issues around the competitiveness of the US economy from different vantage points.
First, the economic impact of higher tariffs resulting from the US-China trade dispute has remained small so far. The consumer in particular is not much affected yet. However, a continuation of high tariffs (potentially to be expanded to Mexico again) is already having its impact on business confidence and will slow investment growth if dossiers such as IP protection and level-playing field Chinese industry policies do not show sufficient progress. Please see some of our recent media clips and blogs.
Second, our annual global productivity release shows that US growth output per hour has continued to struggle through 2018 at below 1 percent. However, some of the more recent estimates from the Bureau of Labor Statistics suggest there might be something of a recovery happening. For example, in the first quarter of 2019, US business sector productivity increased by 2.1 percent compared to a year earlier. Maybe automation is making a comeback and digital transformation is working its way through the economy, making it more productive and competitive?
Finally, competitiveness is a complex phenomenon with many different aspects: trade, productivity, costs, market shares, but also the country’s ability to raise living standards. In a panel discussion on American competitiveness with Steve Odland (CEO of The Conference Board) and Bernard Bailey (President of the Committee for Economic Development) we extensively reviewed the various concepts of US competitiveness, showing there is cause for concern and urgency but no despair.