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Alan Beaulieu
”We expect a “U”-shaped recovery – a broad, rocky bottomed, slow turn to increased levels of activity, because this type of recovery is consistent with current consumer and business-related activity.”
Those in the gases and welding industry should be aware that discussion about the economy in 2010 is wrapped up in four letters: W, V, U and X.
“W” is used for those folks who are looking for a double-dip recession or even the onset of a full-fledged depression in the near term. Sorry, not going to happen.
“V” recovery means a sharp rebound to early 2008 levels of activity. This theory states that the U.S. will once again be powering along on all eight cylinders in short order. Sorry, not going to happen.
An “X” recovery means that there really is no recovery for Main Street. This is closer to reality.
That leaves a “U”-shaped recovery, and that is what we are expecting – a broad, rocky bottomed, slow turn to increased levels of activity. Why a “U”? Please read on.
BROAD, ROCKY BOTTOMED, SLOW RECOVERY
This type of recovery is consistent with current consumer and business-related activity. Neither suggests the near-term demise of the U.S. economy, but neither do they suggest robust growth anytime soon. It will take time for credit markets, businesses and consumers to recover from this long and painful economic recession.
We are forecasting that the U.S. economy will experience a mild recovery in 2010. In essence, a broad trough will occur through the near-term before we slowly begin to climb up the slope toward prosperity. All the talk about green shoots, record S&P 500 ascent and increased auto sales might leave you feeling that the recovery has already occurred. This has left some people wondering why the apparent good news has not quite played out in their markets or homes.
They are right to wonder; the recovery will not be easy to recognize. Business owners have told us that they have experienced increased inquiries, which is quite encouraging. But they also have reported that those inquiries have yet to translate into actual orders. Increased order activity makes for a recovery, not increased inquiries.
The recovery will not come in roaring like a lion. A slow, evolutionary process of recovery from market to market will be the likely economic path for the last few months of 2009 and into 2010. Take a proactive approach and tackle the recovery head-on by taking advantage of a more stable economic environment in 2010. It is time to make your move and start thinking aggressively in terms of marketing and advertising.
WHOLESALE TRADE TRANSITIONS INTO RECOVERY
Extrapolating trends from the Wholesale Trade numbers show us not only what has gone on in the market, but also what to look forward to, and therefore how to prepare. According to the U.S. Census Bureau, annual sales in Wholesale Trade recently were the lowest in over three years. A slumping economy, marked by a sharp decline in U.S. Industrial Production, has led to lower trade volumes across the U.S. durable goods market. Wholesale Trade of Hardware Durable Goods (NAICS code: 4237) is down 16.9 percent over the year-ago level.
