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May-June 2019

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18 PalletCentral • May-June 2019 palletcentral.com n a recent survey of business economists, a majority of the group predicted that the next recession would begin sometime in the next two years. As you will see, recent economic data depicts an economy that is in relatively good shape. There is one indicator however that has usually been a good leading indicator in forecasting a recession that is disturbing. If it is right, you should be getting concerned about a significant slowdown in business. Finally, I wanted to give you a quick update on the softwood lumber market. Recent Economic Events Remain Very Positive The recent report for Gross Domestic Product (GDP) is summarized. Overall growth was still a healthy 3% in the first quarter of 2019. Consumers spending slowed a bit, but recent retail sales indicate that growth will remain strong in the second quarter. GDP Business investment is growing near 5%, but not nearly as much as had been expected given the corporate large tax cut and strong earnings growth. Government spending picked up slightly and now is growing near 2%. Our trade situation has not changed much. Despite policy efforts to decrease imports and boost exports, the overall trade deficit remains near $900 billion in real terms. A key driver for the pallet industry is manufacturing output. In 2017 and 2018 manufacturing output was growing in the 2-3% range. Overall output has been declining for the last 4 months. I M I X E D S I G N A L S : LUMBER Time to Be Concerned? By Lynn Michaelis iStockphoto.com/ktsimage

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