Issue link: http://palletcentral.uberflip.com/i/1212207
PalletCentral • January-February 2020 25 wage sectors, such as manufacturing, and growing in service sectors such as fast foods. The weak performance of the manufacturing sector is evident. During most of this recovery, industrial production growth has tracked very closely with the broadest measure of economic growth, Gross Domestic Product, or GDP. But something happened in 2019. GDP growth has been relatively good, near or slightly above 2%. However, industrial production (I.P.), which is the key driver for the pallet industry, was contracting for the last six months (it did rebound a bit this previous month). Given my estimates for the fourth quarter would put GDP growth up 2% from year-ago levels, but I.P. down over 1%. Part of the explanation is the lower than expected investment in industrial equipment. The slower growth in exports, due to both the strength of the U.S. dollar and the trade dispute with China, have had an impact on manufactured goods demand. 2020 should remain a favorable operating environment for the pallet industry. Demand should remain stable or grow modestly. No Recession Likely in 2020 Despite the length of this recovery, there still are no clear signs that the overall economy will fall into recession this year. Employment growth is still healthy, which keeps consumer confidence higher. The Federal Reserve is not likely to boost interest rates this year since inflation remains modest and near their target rate of 2%. With interest rates flat to down, housing starts should continue to move higher (more on this below) and contribute to sustained growth. iStockphoto.com/ra2studio