Economist Sheds Light on Conflicting Economic Forecasts

Last month, Dr. Chris Kuehl, Managing Director of Armada Corporate Intelligence, presented at Affinis’s fourth Industry Summit. In his presentation, “Finding the Dark Cloud Behind the Silver Lining: Economy in Late 2019,” he shed light on conflicting economic forecasts. We found these takeaways to be particularly thought-provoking.

U.S. Economic Status

• The United States is seeing more traditional, slow growth, which is similar to what happened in 2018 and 2019. It’s acceptable, but unforgiving. At 3 percent, companies are less likely to invest in machinery or expand their territories. Businesses are more cautious.
• As a country, we were technically out of the recession in 2009, but recovery was slow. That sluggish upswing worked to our advantage. It didn’t throw us into inflation or another recession.
• Consumer spending outpaces business investment every year.
• Although there is a commodity shortage, usage is down, so prices haven’t gone up.

Midwest Economic Status

• When looking at growth by state, Kansas is right in the middle with 3.1 percent. Missouri is at 2.3 percent.
• The Midwest has a particularly diverse economy. Some sectors are doing well. Other’s aren’t, which is why growth is in the middle.

Global Economy & Tariff Impacts

• China never had lower wages than other exporters. Instead, they have been the most competitive, because of their infrastructure. At some point, other countries will catch up.
• Countries who compete with China are benefiting from the trade war, if they are importing from other countries.
• There are 65 percent more businesses in Vietnam than last year.
• At this point in time, Wal-Mart and China aren’t passing on tariff costs to consumers.
• 15 percent of the U.S. GDP comes from exports.
• The market may see some impact from the trade war, but it depends on the market.
• Louisiana has been most affected by the Chinese tariffs, because they export rice.

Manufacturing & Skilled Labor Shortage

• U.S. manufacturing makes up $2.7 trillion of the GDP.
• Only 6 percent of high schools offer industrial arts programs.
• The average age of a new hire in manufacturing is 53.
• Manufacturing in the U.S. is now a lot cheaper because of technology. As facilities become more robotic, we are more competitive.
• Many can’t find work, because they don’t have the right qualifications. Every sector has trouble finding qualified and trained candidates. We’re not short on jobs, but instead, people.