Those the fed surveyed were slightly less sanguine. They expect business spending to continue expanding, but expect consumers will cut back on spending. Even with all these negative effects, consumers continue to spend, businesses continue to invest and make money, and the economy continues to grow. Dr. Sung Won Sohn says the government's projections may be too optimistic. According to Dr. Sohn's estimates, there's a 40 percent probability of a recession in 2001.
Economic cycles are alive and well.
We will experience one of those I'm sure in the next year or so. Real estate investors are keenly watching economic forecasts to see whether or not to keep building. The Fed predicts housing starts will fall in Minnesota. As for commercial and industrial real estate, Colliers Towle Real Estate predicts a modest expansion of roughly two percent, or about 6 million square feet. Colliers Towle Vice President Ray Reese says real estate investors should be prepared for a market downturn.