Economist Sheds Light on Conflicting Economic ForecastsPosted on Wednesday, November 6th, 2019 by Kristen Leathers-Gratton
In Industry Trends, tagged in Tags: industry summit
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.