ACCESS PACK EXPO XPRESS ONLINE TODAY. Content is available on-demand through November 30th.

Time to Invest Cautiously in Manufacturing

Our travels across the country and across many industries allow us to gauge the mood of thousands of business folks, and the mood is overwhelmingly pessimistic.

Aw 2164 1002 Econv
Many people are really down about where we are going as a nation and what the prospects are for 2010. We understand where the angst is coming from: high unemployment; disturbing national debt of $12.1 trillion; very tight lending conditions; coming inflation; the near certainty of higher taxes; and pending legislation that will at best increase the cost of doing business. Alright, now I am depressed, too.

OK, that is what people are feeling. Let’s talk about what we at the Institute for Trend Research (ITR) are seeing. We are seeing upside leading indicator activity for 2010 in the Money Supply, the U.S. Leading Indicator, the Purchasing Managers Index, Corporate Bond Prices and in the Housing Starts year over year (12/12). A key measure of economic health is Retail Sales, and the rates-of-change here are moving higher off terrible lows as people slowly return to the more customary role of consumers. The last item is hard to overestimate, given that Retail Sales makes up about 67 percent of the U.S. economy, even in the best of times.

The U.S. Industrial Production 12/12 rate-of-change has also started higher off an October 2009 low (as we had forecasted about nine months ago). Some New Orders series are also turning up as well. It is as if spring had come early after a long winter and we are afraid to believe that it is real.

These are great times because of the opportunities being presented. Low real-estate prices with very low interest rates combine to create a fantastic opportunity to buy an asset that will take advantage of the inflation that is coming at all of us. This is also a great time to buy capital equipment that will improve efficiencies, contain costs and improve cash flow. Many firms can take advantage of the number of talented people who will help you reach your strategic goals.

Prepare for recovery

It is important to know that it is a real, sustainable recovery trend because that knowledge will govern our actions. We must shrug off the close-fisted, hang-onto-the-cash mentality of recession and start spending on preparations for the 2010, and most likely 2011, recovery. Consider these ideas as you look forward to the mild recovery of 2010:

•    Is your company ready to handle increased order/production/delivery activity in 2010 of 5 percent to 30 percent?
•    Are there skill gaps in your workforce? Do you need to increase training programs?
•    Should you invest in capital equipment now that will return cash in even a modestly busier environment?  

Of course, all of these actions are dependent on your knowing where you are in the business cycle and in determining how long the upswing in the economy will likely last. We refer you to our book, “Make Your Move,” if you wish to learn how to determine where you are in the business cycle, find leading indicators that fit your company and determine which Management Objectives (actionable items) are right for you.

We are not sanguine about the dangers that are lurking about. The threats are real. Some issues are near or intermediate term and some are long term; however, any way you look at it, there is presently some upward momentum for U.S. and international economies, and it is up to each of us to make something happen now.

Alan Beaulieu,, is President of the Institute for Trend Research (, in Boscawen, N.H.

Subscribe to Automation World's RSS Feeds for Columns & Departments

Discover New Content
Access Automation World's free educational content library!
Unlock Learning Here
Discover New Content
How use of robotic technology is sweeping across all industries
We asked nearly 60 industrial end-users and system integrators about their use of robotic technology. This report details the trends they identified and how to compare different types of robots.
Download Now
How use of robotic technology is sweeping across all industries