Enjoying the good times; prepared for the other times

Let the good times roll.

That’s kind of the feeling you get as you read the latest headlines. The August PMI from the Institute for Supply Management came in at 59 percent, which was a bit higher than many experts expected. Part of that same report indicated that the New Orders Index showed growth, marking the 15th straight month of positive activity.

The excitement in the metal fabricating industry is building toward a FABTECH event that has grown exponentially over the years. This year’s exhibition, scheduled for Atlanta, Nov. 11-13, is going to occupy 500,000 square feet, something that usually occurs only at the Chicago shows. Exhibitors must believe that metal fabricators have an incredible thirst to see new technology or that the Southeast is a new manufacturing hub because they are confident enough to invest in trade floor space like they have never done before at a show outside of Chicago.

If you look at the companies that made The FABRICATOR’s FAB 40 list, you’ll notice an overwhelming percentage with 2014 sales topping 2013 sales. Metal fabricating is a good business to be in right now.

Will the same hold true in three years or five years? All periods of economic growth—no matter how slow and nontraditional they may be—eventually come to an end. Should metal fabricators be worried?

Alan Beaulieu, president of ITR Economics, spoke at FABTECH 2013, and his long-term prognostications for the economy were not optimistic. He called for a recession in 2019.

The big culprit is the rising U.S. debt. In particular, he said that by 2020, interest and entitlement programs will be swallowing up the U.S. budget. It’s a big reason he’s predicting another Great Depression in 2030.

Of course, perspective can put even the most negative of predictions in a new light. For example, Beaulieu isn’t predicting economic doom for another four years!

It’s actually easy to buy into the belief that the economy will continue to churn in a positive direction over the next few years. As foreign events literally blow up in the Ukraine, Middle East, and Africa, the U.S. business activity doesn’t seem to flinch. Also, one of the largest contributors to economic growth—the construction industry—still has tremendous room for improvement; current economic growth is occurring even while one of the largest industry sectors is still trying to find its balance.

It’s not fun prognosticating a business slowdown, but people need to keep an eye out for it. In many instances, metal fabricators are doing just that. They maintain core staffs but increasingly use temporary employees to weather the ups and downs of the business. They may not know when the U.S. economy will retract in a noteworthy way, but they most definitely will be ready for it.