The “R” word is getting thrown around quite a bit these days, from all corners of the economy-watching globe. CEOs, analysts and people who have absolutely no business sharing their thoughts on the economy – namely anyone who appears on a cable news blab show – have all been weighing in on the future of the U.S. economy with varying levels of terrifying perspectives.
More troubling is news some in our space – a generally more levelheaded group of men and women – are similarly worried about the fate of the U.S. economy.
The National Association of Manufacturers, one of the largest trade groups representing the industrial economy, conducted a survey of members from Nov. 29 to Dec. 13. Their findings are sobering. More than 60 percent of respondents believe the U.S. economy will slip officially into a recession sometime in 2023.
“The majority of manufacturers expect a recession this year. Congress failed to act on essential tax reforms, which complicates investment, increases inflationary pressures and could stifle economic growth,” said NAM President and CEO Jay Timmons. “Much needed permitting reforms and provisions to strengthen our ability to conduct research and development, buy machinery and finance job-creating investments – which we need to promote growth within the sector – were left on the cutting room floor last year.”
This particular economic forest is daunting, but an examination of the trees provides more hope.
In this month’s issue, Metal Center News spoke to representatives from three very different sectors: toll processors, ERP software makers and mechanical tube supply chain participants. While no one was predicting 2023 to be a boom year, the floor the most pessimistic among them envisioned was a modest decline. “I think it’s going to be a little softer than 2022, but I’m not expecting anything horrible,” Darrell Sobeski, president of Precision Slitting Service Co., Romulus, Mich., told MCN. Others anticipate a rather standard year of business levels.
And it’s not just there. The cash-hoarding of the publicly traded oil and gas companies in 2022, coupled with still-high crude oil prices, should lead to a healthy year for the energy sector.
Even construction, generally seen as a laggard in the year to come (outside infrastructure, of course) has some bright spots. Friend of MCN Ken Simonson’s most recent Construct Connect report showed an encouraging rebound in both construction employment and starts in December.
There are obvious reasons for worry this new year – inflation that hasn’t been reined in, rising interest rates, ongoing supply chain bottlenecks and, naturally, whatever monkeyshines the folks in Washington engage in as a proposed antidote to these problems. But, in this case, we hope the various trees give us a better sense of the outlook in 2023 than the forest.