Investment advisor sees 3.5 percent growth in GDP
Local investment adviser Doug May is forecasting good things for the national economy in 2011 and believes the Grand Valley might enjoy some of that progress.
May, the owner of May Investments, 244 N. Seventh St., Suite B, said during an information session Tuesday at The Commons, an assisted- and independent-living community at 625 27 1/2 Road, that he expects gross domestic product to increase 3.5 percent this year for a few reasons. Among them are growing consumer confidence, a healthy stock market for at least the first half of the year, and some increased government spending.
Consumers make up 70 percent of the U.S. economy, which is why an eight-month high in the Consumer Confidence Index is noteworthy, May said.
“I think it will continue to improve,” he said of the index, a measurement of the Conference Board, which was at 60.6 for January. A reading of 90 signals a healthy economy.
As for the stock market, May is skeptical much good will happen in the telecommunications sector, which is losing land-line investors, but he predicts this will be a good year to invest in a growing technology industry and relatively inexpensive health care stocks. May said data since 1900 shows most of the year before an election year is a good for the stock market and better than the average performance of other years.
May hesitates to label the current situation a bull market because of two factors that may hold back the economy: the possibility that interest rates will increase after dropping for two years, and the difficulty of attaining bank loans. May said people also should keep an eye on China’s economy, although he doesn’t believe that country’s economy will have as big an effect on the U.S. as some may think.
As for recovery locally, May said the one national indicator that will most affect the Western Slope’s various industries is natural gas drilling. May is optimistic the local economy will benefit from U.S. rig counts numbering 200 higher now than in 2006.
The Daily Sentinel reported Monday some industry experts are predicting energy companies will pass over the area and put new rigs elsewhere for at least the near future.
The Associated Press contributed to this report.