At the National Fluid Power’s annual International Economic Outlook Conference, Alan Beaulieu of ITR Economics spoke on “U.S. & Global Macro Trends and Impacts,” and the overall outlook is positive for the manufacturing world. In examining the U.S. economic leading trends, it seems clear that there will be a slowing ascent in the next calendar year. But Beaulieu insisted that today’s anxieties (such as supply chain issues) will ease in 2022, and next year will be a more measured business that manufacturers will enjoy — and prosper in.
Interestingly, he explained that we shouldn’t worry about interest rates; they aren’t going up anytime soon, and when they do, it will not be by a large amount. In fact, he implored the business owners in the audience to “go out there and make an acquisition now.” Beaulieu said to be aggressive with their businesses but not to use too much cash — instead, borrow money and take advantage of these low interest rates.
Concerning the physical infrastructure bill that’s moving through Congress, he thinks that it will come to fruition and the money will be spent in the next 5-7 years. Beaulieu, while not a fan of deficit spending, said that very little investment in infrastructure has been a trend for years, and it is really needed. He described himself as a big fan of the bill, because we’ve ignored infrastructure for so long. And the coming infrastructure work will be a shot in the arm for the construction and related fields, positively impacting mobile equipment manufacturers.
Other interesting comments from Beaulieu included:
• There is a lot of deficit spending that we’re getting away with now that we won’t be able to in the future. When inflation really heats up, it will become a disaster. This is not a “today” problem, but it’s a future problem.
• If you believe the partisan logic that “the other party” is responsible for massive deficit spending, the data simply doesn’t support that. Both parties are equally guilty, especially when measured over decades.
• There’s a political emphasis on climate change that won’t be going away any time soon.
• What we’ve gone through over the last 18 months has made us agile and has shown us that we can change.
• There are record high new orders through 2023. Manufacturing in this country is kicking it … it’s an exciting forecast for the coming year.
• The U.S. is the second largest manufacturing and exporting nation in the world (China is number one). People who say we don’t manufacture anything here anymore, “don’t know what they’re talking about.”
• Right now, it is the workforce that is in power. You’re going to have to play that game for years to come. If you don’t like that, your options are to automate — or quit.
• You can make a very good living in the trades, and we’re finally starting to understand that in this country. If you get your child to learn a trade, they’ll be in as good of a position as that kid with a four-year college degree who graduates with a bunch of debt … and they’ll be primed to make a good living and someday retire successfully.
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