I had the recent pleasure of spending several days with industry leaders at the Woodworking Industry Conference in Puerto Rico. These folks are active members of the major trade organizations and key decision makers at the companies who supply your shops with machinery and supplies. They more or less make the woodworking world go around, which makes WIC the perfect place to gauge the industry’s vibe.
We got some help from the likes of ITR Economics president Alan Beaulieu, who provided an economic forecast for 2014 and beyond.
Let’s get the bad news out of the way first: Beaulieu is predicting a Great Depression will occur sometime around 2030. But otherwise, he says we’re in pretty good shape.
“We’re not in a fragile situation,” Beaulieu says. “There’s been a good rate of growth in the United States, yet a lot of Americans have the perception that the United States is just kind of barely getting by. There are still people in this country who think we’re in a recession. The reality is this economy is vibrant.
“If you’re not setting audacious goals for yourself, you’re not taking advantage of a situation that doesn’t comes along too often.”
The good times will last until 2018, when something less than a Great Recession is forecast. “A great time to sell your business is in 2018. Sell it for cash to someone you don’t like,” Beaulieu says.
In the meantime, just go with the flow.
“The leveling that’s going to occur should not scare you. It’s not going to result in a recession. The economy that we’ve become accustomed to over the last year is slowly going to encounter more headwinds, but as we slow down we’re not going to break down. The forecast for the [immediate] future is year-over-year growth,” Beaulieu says.
Among the positive signs in the current U.S. economy are that banks are lending, retail sales are rising, the non-residential construction market is improving and all of the leading economic indicators are pointing up, according to Beaulieu.
“But the people who work for you are feeling [the effects of] inflation and that will have an impact on you moving forward,” he says. “The reality is we have more job opportunities than we can fill. So don’t worry about the unemployment rate. A lack of skilled labor is the real issue.
“We’re going to see wage inflation. You’re going to have to find a way to pay your top workers more. Otherwise they’ll be poached.”
With a recession and depression years away, Beaulieu continued to stress that these are days of opportunity.
“When’s the best time to buy equipment and invest in your business? Now because wages, taxes, inflation and interest rates are all going up.”
This article originally appeared in the June 2014 issue.