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PalletCentral • May-June 2020
palletcentral.com
Lynn Michaelis is president
of Strategic Economic
Analysis, a company
which assist business
managers in thinking
about the future. He was
previously a vice president
and chief economist for the
Weyerhaeuser Company.
Lynn may be reached at
stratecon@icloud.com or
206-434-8102.
1.6 million units in February and was set to stay
strong in 2020. Unlike 2007, housing starts were
not keeping up with the demand. Recent sales
activity suggest starts will rebound quickly in the
second half of the year as restrictions on building
activity are removed.
Housing Starts
The bottom line is, as daunting as the current
situation might appear, it is critical to stress one
point again: this recession has not been caused
by a financial debacle such as in 2007-08. The
fundamentals of the U.S. economy were sound
in February and early March. Those economic
fundamentals suggest that economic growth should
rebound to the 3-4 percent range over the next 12
months. IP should do a bit better at a 5-6 percent
rate, given the need to restock depleted inventories.
Because consumers and business will be cautious,
use the modest economic growth as your best-
case planning scenario. But given the extreme
uncertainty, you should test your operating strategies
with alternative scenarios. While there are no
guarantees, we do know that we are a comeback
kid kind of country. And, we will see better times,
eventually.
