20% - So far, the second half is looking stronger.
34% - It’s not looking as good as the first half.
46% - About the same.
Gross Domestic Product (GDP) is the measurement of the performance of the U.S. economy based on activity within the geographic boundaries of the country. Gross National Product (GNP) is GDP plus the performance of all U.S.-based interests conducted abroad.
So the business GM, Caterpillar, IBM, and Bubba’s Lawn Service does within our borders rolls up to GDP, and is then added to what GM, Caterpillar and IBM does in the EU, China, etc., to calculate GNP.
This week, GDP results were released by the government and it showed the U.S. economy grew at only 1.5% in the second quarter of 2012. That was down from the 1.8% GDP figures for Q1 2012.
For years it has been generally held that 3% annual GDP was the baseline for acceptable U.S. economic performance. These last two reports put the average for the first half of 2012 at 1.65%, essentially half of that baseline.
We wanted to see what the second half of this year was looking like based on what our small business audience is seeing, so last week we asked this question in our online poll: “Regarding sales projections for second half of 2012, how does it compare to actual sales in the first half?” Here’s what we learned:
One in five said, “So far, the second half is looking stronger,” while more than a third of our sample reported from the other end of the spectrum with, “It’s not looking as good as the first half.” The middle group came in at 46% who said they expected the rest of 2012 to be “About the same” as the first half.
Based on YTD GDP, and looking at the recent survey of our audience of small businesses, the 2012 economy could wind up being weaker than either of the previous two. That’s not the kind of trend Americans expect and, under the circumstances, certainly not what we need.
There are many structural issues remaining that we have to work through in order to achieve a more robust economy. But the greatest impediment to sustained economic expansion in America today is the uncertainty that has been pervasive on Main Street since 2008.
Structural challenges can be removed with the healing properties of performance. But pervasive uncertainty - caused more than anything else by a lack of confidence in national leadership and their policies - can only be fixed when those leaders demonstrate that service to country is more important than service to party.