Global Fastener News

“This is a year you should be doing things, not waiting for a better time,” economist Alan Beaulieu advised the National Fastener Distributors Association.

During 2018, fix your website or invest in training for people you are hiring without skills, he added.

This is a time to “borrow and invest in inflation-beating investments such as new product lines or opening in a new geographic territory,” Beaulieu suggested. “Lock in your lease.”

“Plan to pay back with inflated dollars,” he said.

The U.S. economy in 2019 will be “slower” but that “is not bad,” Beaulieu said. A recession occurs about once a decade, he noted.

The leading indicators are slowing, implying a slower 2019, but not a recession, the president of ITR Economics explained. The economy will rebound for the 2020 election year, he predicted.

Certain slowing has to happen, Beaulieu said. He cited U.S. boat production as an example. It has been up for eight years and can’t increase forever.

Beaulieu warns of a depression about 2030, but he suggested many people at the NFDA meeting can sell their companies and retire by then. Plan to pay off debt by 2028, he said.

Beaulieu pointed to multiple factors in declaring a good economy for 2018:

• U.S. manufacturing is doing well.

• The U.S. is almost “energy independent” and could be if needed.

• China’s labor costs have been rising 15% to 20% annually, “without productivity gains.”

 China has “a dictator again” and “we know what happens with state-owned enterprises,” Beaulieu commented.

Earlier this year, the Central Committee of the Chinese Communist Party removed term limits, allowing president Xi Jinping to stay in power indefinitely.

• A problem for the U.S. economy is that “we don’t produce enough workers. Our fertility rate is too low.” Other low fertility countries such as Japan, Russia, Germany and Canada rely on immigration to provide a workforce.

• To spur the economy, tax cuts need “to be on people who spend,” Beaulieu said. Thus far half of companies gaining from the Trump tax cuts are investing in stock buybacks rather than spending, he observed. The tax cuts “are not spurring the economy.” 

Savings are up and “that is good long term,” Beaulieu noted.

Want to assist your young adult offspring? Don’t pay off student loan debt, he advised. “Buy them a home as an asset,” which will increase in value. Web: NFDA-Fastener.org