If you knew today that the U.S. economy would look stronger and better 10—or even 100—years from now, would you change the way you plan, forecast, and manage your day-to-day activities? How about your outlook and plans for 2021?Undoubtedly, 2020 had its challenges. However, despite the pandemic and the uncertainties around essential businesses and our own temptation to endeavor unfamiliar markets, the past year brought us valuable lessons and even better outcomes. Of most value, is the reminder to remain true to our core business. This allowed us to tune out uncertainty and factors outside of our control, while leveraging our strengths within a changing marketplace.
Thanks to 2020, we are affirmed that partnerships, collaboration, and service are invaluable. Despite challenges such as lack of inventory, logistics uncertainty, limited production times, or lack of staff, open and honest dialogue with our partners kept us moving forward. At our core, we are a service center—this is the role we play in manufacturing, and our partners recognize and value that.
In early 2021, Editor of Metal Center News Dan Markham published an article titled “A Good Year, and Century, on Tap for U.S. Economy” recognizing an unstable, vulnerable path for the U.S. economy, and the manufacturing sector specifically. However, he goes on to shed a positive light on 2021 with perspective from ITR Economics’ Brian Beaulieu, who says that the COVID-19 pandemic (the driving force behind 2020 economic distress) may be the very reason to expect new and better outcomes in 2021 and for the next 100 years.
A driving factor in Beaulieu’s assessment? A decline in China’s workforce population, resulting in an anticipated loss of 100 million workers every 15 years. History suggests that a dramatic decline in the workforce has a significant impact on economic growth. On the contrary, the U.S. population is expected to continue to grow. This growth in population means a vast and more diverse talent pool.
There is a stigma that many jobs within the manufacturing industry are low-paying. However, the skills required for many jobs translate to better wages than most people know about.
As U.S. manufacturers continue to recruit and develop a new generation of laborers, this should be a plus to the economy as a whole. How can the growth of the U.S. population positively impact your business? What plans can you begin to make in 2021 to leverage a workforce well-positioned to dispel the hiring challenges of access and availability?
Having this information now can positively impact our 2021 outlook and our approach to planning for the next 10, and even 100, years.
A Good Year, and Century, On Tap for U.S. Economy
By Dan Markham on Jan 4, 2021
Tearing out the final page on the old calendar always gets us thinking broadly about the year ahead. How will the economy fare? What are the threats to our expectations? When do we get to stop pretending we’re keeping our resolutions?
This year is no different, and perhaps even more so, given the rough 12 months gone by. Alas, the reason behind the inconceivable year we all just endured also clouds our vision of what lies ahead. The development and rollout of vaccines in mid-December is an enormous cause for optimism, but it doesn’t eliminate the uncertainty about when normal economic life resumes.
Forecasts for this year demonstrate that unsettled outlook. Projections naturally call for growth, given the decline in GDP suffered in 2020. But a sampling of those prophecies covers a wide range, from the low three percent area to more than six percent. The story is the same when the focus is narrowed to the manufacturing sector. Growth is expected, but how much is unknown.
While rifling through the Internet for some freely available forecasts, I stumbled across a presentation made by ITR Economics’ Brian Beaulieu to accounting firm Barnes Dennig in November. Drawn by the familiar surname (brother Alan is a speaker of choice for several trade groups), I signed up to listen to his in-depth outlook of the year to come.
Brian Beaulieu was, if not outright giddy, decidedly upbeat about the prospects for the economy at large, and the manufacturing space specifically.
“Recovery gets you back to where the growth peak occurred,” he said. “Growth is when you have record high numbers. We’re going to have recovery in 2021, but in 2022 we’re going to have real growth going on again.”
Beaulieu said the driving force of the short-lived but abyssfully deep recession of 2020 is what makes the rebound different from previous downturns. “COVID was a natural disaster, not an economic disaster. COVID created the economic chaos. That matters in terms of how we are going to recover.”
But perhaps the most interesting, and encouraging, aspect of his remarks was not when he looked 10 months into the future, but 10 decades. Leaning on the ITR hallmark of the eternal importance of demographics, Beaulieu said the sun is starting to set on China’s era of spectacular growth. The country will begin shedding workers, losing approximately 100 million every 15 years, which is a huge drag on a country’s economy.
The United States stands in sharp contrast to those conditions threatening China. The U.S. has an increasing population, abundant natural resources and the Rule of Law in its corner, all factors that will keep the country the place to invest and do business.
“The U.S. is going to be the world’s No. 1 economy for the next 100 years. You can take that to the bank,” he said.