Issue link: http://palletcentral.uberflip.com/i/522141
22 PalletCentral • May-June 2015 palletcentral.com One weak spot will be net exports and could slow industrial production growth a bit. Since net exports are a small part of the overall economy, the stronger dollar will temper growth, but not significantly. GDP and industrial production growth will remain healthy through 2016. The Bottom Line Prospects for the pallet industry look very good through 2016. Expect growth rates in key markets to remain healthy—4-5%. Weaker demand for hardwood lumber by the energy industry should keep hardwood lumber prices in check. The flip side of the good news is that wage pressures will build and the Fed will boost interest rates later this year. Finally, if the strong growth continues through 2016, the Fed wants to "normalize" interest rates by the end of 2017. This means a level of short-term interest rates consistent with trend economic growth and inflation near 2%. Financial markets however still do not believe they will be this aggressive. PC ECONOMY Lynn is president of Strategic Economic Analysis, a compa- ny which assists business managers in thinking about the future. Although the primary focus of his firm is housing and wood products, the company stays current on overall eco- nomic activities in the USA and globally. Lynn may be reached at lmichaelis@getfea.com or phone: 206-434-8102.