The economy: Moving forward in 2021?
Our parent company recently hosted a webinar with renowned economist Alan Beaulieu, of ITR Economics; it offered an interesting look at the economy over the coming months and years. And the outlook Beaulieu gave was quite positive in nature, something we all could use after the stressful 2020 we all have endured.
Beaulieu noted that there’s massive deficit spending going on. But is that a concern? He said that his forecast is actually not dependent on size of next stimulus bill — as long as interest rates stay low, there’s no problem with the amount of debt.
“We created such a large hole with the pandemic, we can pour a lot of money into that hole before we’ll see any inflation,” he said.
From a business perspective, he told the manufacturing audience that this is a perfect time to do four things: make acquisitions, innovate your products, invest in efficiency gains, and invest in sales and marketing.
While many people are worried about one party being in total control in Washington D.C., Beaulieu cautioned that this sort of alignment isn’t a danger sign. He said that, looking at historical numbers, the United States’ GDP and the country’s economy is really irrelevant to whether either party is in total control.
His other points included:
- The Biden Administration is going to work to boost American manufacturing and is not going to go easy on China. You’re not going to like some things it does, but you are going to like other things it does.
- The U.S. economy, and in some cases, the world economy, is going to be positive this year. His firm’s 12 U.S. economic indicators are all trending to “rise,” which is exceptionally good news.
- Low-cost mortgages point to more housing construction; the housing 12MMT is the highest in more than 12 years.
- Canada will continue to be an important ally and an important business partner of ours.
- Military spending is not dependent on who’s in the White House but is based on what’s going on in the world. Given the uncertainty in the world, it’d be hard to imagine a decline in military spending. But that said, Beaulieu pointed out that high tech and ships and sonar and parts for planes are very different than boots on the ground or bases.
- By late 2022 or early 2023, we will have a full recovery in U.S. industrial production.
Beaulieu noted that the United States is still the second largest manufacturer in the world; the people who think that we don’t make anything here anymore are wrong. Looking at U.S. production indexes, the last quarter is showing a positive shift . So, manufacturers should be gearing up, he said.
“You have a lot of blue sky ahead of you, and I hope you’re ready to take advantage of it.”
Paul J. Heney – VP, Editorial Director
On Twitter @wtwh_paulheney