This summer industry experts gathered at NFPA’s 2016 Industry and Economic Outlook Conference in Wheeling, Illinois to share information on industry economics, market forecasts and technology breakthroughs surrounding the fluid power supply chain.
Studies showed that in 2015 the U.S. was responsible for 24.5% of the world’s Gross Domestic Product (GDP) up from 22.5% in 2014. Of which, manufacturing comprised 73%, mining 17% and electricity generation 10% with manufacturing and mining on the rise.
After four years of global growth, 2016 reports a much lower growth than initially forecasted. One of the main reasons is the decline in oil and gas production due to renewable energy use coupled with over-production from previous years. Other causes include:
- political unrest (Grexit, Brexit, U.S. presidential election)
- volatile financial markets and the risk of recession
- lack of business investment in new equipment
- deceleration of growth in China and other emerging national economies
While the economic growth forecast for 2016 looks dismal, better days are expected in 2017 according to industry experts. Some analysts attribute this to:
- consumers being in better financial condition
- favorable interest rates
- decreasing unemployment and increasing wages
- banks are lending
- retail sales are at a record high
- non-residential construction is improving
- commodity prices are experiencing some upside pressure
A cursory glance into late 2018 shows a mild recession continuing through 2019.
What should you be doing for the remainder of 2016?
The advice of one industry expert is to:
- budget for continued economic growth driven by the consumer
- invest in customer market research to reduce price sensitivity
- make sure your training and retention programs are top notch
- make marketing and advertising spending increasingly effective
- drive efficiencies with technology
- hire sales people and leaders
- lock in costs in 2016
- expand credit offerings to garner market share
- plan for higher wages and higher energy costs
In a nutshell, the economic overview for 2016 is much worse than expected. The GDP is the slowest it’s been since 2009 at 2.0% and the U.S. Industrial Production (IP) is at its weakest, -0.9%, since the financial crisis. Fortunately, 2017 is looking up.
Detailed information about the economic outlook and copies of speakers presentations can be found by visiting http://nfpahub.com/events/conferences/the-ieoc/.