U.S. Industrial Production is the major benchmark used by The Institute for Trend Research (ITR) when talking about the
The forecast calls for U.S. Industrial Production to end this year 2.7 percent ahead of 2006, followed by a 2.4 percent growth rate in 2008. Plan on more sales opportunities, but keep in mind a growing competitiveness and that it will be increasingly difficult to raise prices, despite some underlying inflationary pressures.
A word about labor is in order. Many firms are out hunting for qualified people for varied positions. The strength of the economy and the low unemployment rate mean that qualified labor is harder to find and will be more costly once found. This is called wage inflation. There is not much you can do about it except to keep current employees happy and provide sufficient in-house training and incentives to minimize your need to go “outside” for help. We would also suggest that you remember you are likely to need less, not more, fixed and variable labor two years from now. Try using contract labor, overtime and subcontractors when possible.
Fed on track
Wage inflation is a fact of life in the
Readers servicing firms directly or tangentially related to the housing industry are well aware of the current difficulties and of the varied projections regarding a recovery in the industry at large. Our analysis leads us to conclude that the drop in housing starts may level off around mid-2007, but that an overt and extended recovery is not likely. Readers should plan on stability more than recovery in the housing industry in the latter half of 2007 and in the first half of 2008.
Those of you serving the automotive industry are faced with a series of challenges, ranging from the changing face of
Chemicals & Allied Products Production is walking in the footsteps of its larger sibling, U.S. Industrial Production, as it transitions to Phase C, slower growth. The data trend is essentially flat right now. We think a mild decline later this year will bring the year as a whole in about 2.3 percent below 2006. There are internal indications in support of the forecast, and these are buttressed by the decline evident in the U.S. Leading Indicator. 2008 will recover those losses and then some, with a projected 3.6 percent annual growth rate.
Alan Beaulieu, email@example.com, is Senior Analyst, an economist and a Principal with the Institute for Trend Research, in