The US remains the world s largest economy, and despite increasing trade linkages with other regions around the world, domestic factors still dominate the country s economic outlook. Relative to other developed economies, the US has a relatively smaller public sector, with government consumption and invest- ment combined contributing about -- percentage points to total GDP. ...The country holds more than -.-mn patents still in force, more than any other country. Private Consumption: Private consumption accounted for --.- of total GDP in ----, and has remained within the narrow range of between --.- and --.- for more than a decade, despite relatively large movements in other components of the economy associated with commodity price fluctuations and the global recession of ---------. We expect that private consumption will remain the principal engine of US growth in the coming decade, with the headline figure closely tracking changes in household spending patterns. ...Taking all government spending together, education accounts for the larg- est share of the total, at --.- , followed by defence, at --.- . We expect government officials will continue to relax spending constraints on both defence and non-defence programmes in the years ahead, although political pressure to maintain fiscal discipline will limit the scope of this change somewhat (see
...---- ----e ----f ----f ----f ----f ----f ----f ----f ----f ----f ----f Private final con- sumption, USDbn --,---.- ...Source: BEA, BMI need for greater capital investments, particularly with regards to transport infrastructure. Net Exports: Although we believe that the dollar bull run is nearing an end, the greenback will remain strong by historical standards, particularly as investor uncertainty persists in other developed markets such as the eurozone. This, coupled with a strengthening US consumer sector, will bolster demand for imports and diminish export competitiveness. This will weigh on net exports in real terms, despite a lower import bill (owing to lower fuel costs) which will support the nominal trade bal- ance. Finally, the steep decline in the price of oil will weigh on US crude producers margins, and reduce the pace of domestic energy production expansion over the next several quarters, requiring greater volumes of fuel imports than would have otherwise been the case.
...
