Fabricators may look back at 2013 as a turning-point year, an initial ramp-up period that may be follow. At least, that was the picture keynote speaker Alan Beulieu painted at this year’s FABTECH in Chicago, Nov. 18-21.
Popular perception has it that the U.S. is in the middle of a long, slow, weak recovery. Keynote speaker Beaulieu doesn’t see it this way. The CEO of ITR® Economics International, with U.S. offices in Boscawen, N.H., said the current economic climate isn’t anything to sniff at, really. It’s not as robust as the 1990s, which was fueled by technical leaps in computing, or the 2000s, fueled by an artificial asset bubble.
“This is a normal run rate,” he said. “GDP is at record-high levels, and it’s growing. In fact, this growth isn’t particularly fragile, and you’ll be enthused about the next five years. And you deserve the credit. You now do more with fewer people, and you’ve made the right changes.”
He added that the manufacturing economy will slow slightly during the second half of 2014, with the fabricated metal products sector down a little more than 2 percent. That brief dip, he explained, will come thanks to government’s fight over the debt ceiling and budget early this year. He added that changes put in place by the Affordable Care Act may hamper consumer spending. But come 2015, the economy will continue its growth through 2017.
He added that in the coming years inflation will rear its head, though that head doesn’t have to be ugly. “You’ll have higher interest rates, and with inflation, those interest rates will be pushed higher,” he said. “That just means you need to manage your company differently. And if we did it in the 1970s, we can do it now.
“It comes back to price and purchasing power,” he added. “Borrow as much money as you can get this year and next year. Because you’ll be paying it back with inflated dollars.”
When will inflation come? Few expect it soon, with wages and commodity prices relatively steady or falling, and the money supply tied up in the banks sitting on trillions in liquid assets. But judging by technology on the floor and—especially—record attendance (more than 40,0000 over four days)—many in the industry consider now a pretty good time to invest.
Custom fabricating shops see all kinds of jobs, large and small. Flexibility is important. But when a small job results in multiple changes that require a revised quote and the customer isn’t happy, it might be better to let the job go. Yes, you need to please customers, but you also need to make money.
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