This year is starting off slow as expected but there are some positives. Corporate profits remain high, corporate balance sheets are pristine by historical standards, the stock market has lifted valuations, and job growth as actually held up relatively well in the last six months despite the political uncertainty.
The credit environment remains uneven. Overall, however, the low interest rate environment and the fact that US banks are recapitalized are favorable for growth and investment in commercial real estate.
The ever important US housing sector has shifted from being a drag on economic growth to starting a recovery which has helped to broaden economic growth geographically. The combination of steady job growth, housing recovery, and stock market gains is good for consumers too.
Overall, companies remain cautious but there is more optimism (or maybe less pessimism) now than six months ago for sure. I think this is due to some of the acute risks like the Euro break-up fading, and probably due to some “uncertainty fatigue.”
I expect more businesses to start to charge ahead with strategic plans to find opportunities for growth.