Are You Prepared for the Economic Growth to Come?
Do you have the right assets and the right people in place to take advantage of the economic growth that’s headed your way?
Speaking at the Copper and Brass Servicenter Association annual meeting last month, economist Alan Beaulieu of ITR Economics presented a largely upbeat forecast for the next five years and urged executives to position their companies to capitalize on the approaching opportunities.
“Over 40 percent of Americans still think the economy is in recession. It may not feel like it, but the economy is strong,” he said. The high unemployment level tends to dampen the public’s attitude, but in fact the rate of growth is near the historical average of around 2.5 percent. U.S. industrial production will increase at a healthy 3 percent this year, slowing in 2014 as the economy experiences a mild recession, but then accelerate in the 2015-2018 period, Beaulieu predicts. “This is the rate of growth we can expect, and you and I need to find a way to maximize our potential in his type of economy.”
Leading the economy is the amazing energy sector. America’s goal of energy independence is a realistic possibility, he said. Exploring untapped resources using the controversial “fracking” drilling technique promises a long-term supply of cheap oil and natural gas that will fuel economic growth for decades. In the process, it will attract companies from around the world that will build new plants in the U.S. and hire American workers.
Interest rates remain at historic lows, but not for long. Beaulieu predicts rates will begin to inch up in early 2015, as the Fed acts to head off inflation. So now is the time to take out a loan, he said. “If you have not borrowed money yet, you only have a little time left. Dream big. Modernize or acquire. Go borrow so you can invest in the five years of economic activity that is coming your way.”
Outlining his Phase Management Objectives, Beaulieu listed the steps he recommends for service centers to prepare for 2013-14: Model positive leadership; invest in customer market research; train your people and measure their progress; review and uncover competitive advantages; spend money on new products, marketing and advertising; lock in costs; improve efficiencies with new technology and software; add sales staff by hiring top people; and check all your systems to make sure can handle increased activity.
“Look at your business and ask yourself, if I am going to be busier and busier in the next five years, what are the bottlenecks to my capacity? Do I have the right systems, the right people, the right equipment? What could keep me from becoming successful?”