Manufacturers Must Address Three Emerging Global Trends When Recovery Begins, Says Industry Economist
Cautious Consumer, Consolidations, Unsettled Markets Cited
“Admittedly, analysts are having a hard time settling on what the news of the day might mean,” says Dr. Chris Kuehl in the latest FMA economic update newsletter Fabrinomics. “The latest data shows manufacturing levels in
“The question is whether we are transitioning to a solid growth period or to something flatter,” Kuehl adds. “The best that can be predicted at the moment is that three trends are emerging.”
The first trend is really a continuation of one that has dominated the past several months - a cautious and wary consumer, according to Kuehl.
“The recession may have started to fade in the past couple of months, but there has been considerable financial damage and it will be a while before the consumer jumps back in,” he explains. “This limits the advance of many sectors - automotive, appliances, major electronics, furniture, and so on. It may be well into 2010 before the consumer really comes back to life.”
The second trend relates to the consolidations taking place in various industries. “It hasn't been automotive alone that has seen this reduction and distribution,” says Kuehl. “Major industries are no longer centered in the
The third trend is movement toward a more unsettled financial market that carries over into other sectors.
“The banks and investment groups are getting back on their feet, but they will be changed institutions when they do recover,” Kuehl says. “The old-school banker will be back in vogue, and that banker will have a host of government agencies looming over his shoulder. This means that capital flow will be inhibited, making it harder to expand and invest to accommodate the two previously described trends.
“Cash will remain king for a while longer, and there will be more growth through mergers than from organic expansion.”
For manufacturers, the implications vary, all depending on where a company sits within a given sector, Kuehl concludes. “This is the dangerous moment when competitors make their moves and a company without some strategic sense of how to organize often finds itself constantly on the defensive - reacting to attacks by competitors.
“Manufacturers are in a more challenging position, as they also have to puzzle out what their consumers are thinking if they want to keep servicing them.”
Based in Rockford, Ill., the Fabricators & Manufacturers Association, Intl. (FMA), is a professional organization with more than 2,300 members working together to improve the metal forming and fabricating industry. Founded in 1970, FMA brings metal fabricators and fabricating equipment manufacturers together through technology councils, educational programs, networking events, and the FABTECH International & AWS Welding Show. FMA also has a technology affiliate, the Tube & Pipe Association, International (TPA), which focuses on the unique needs of companies engaged in tube and pipe producing and fabricating.
NOTE TO MEDIA: Economist Dr. Chris Kuehl is available for interviews on this topic and other economic issues. Please contact
As an option, you may reach Kuehl directly on his cell phone at 816-304-3017.
Contact
Patricia LeePublic Relations Director,
Fabricators and Manufacturers Association, International (FMA)
patl@fmanet.org
+1-815-227-8286
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