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Interest Rate Outlook The slow growth has another plus. Some of the traditional bears in the financial press have already started to raise concerns about an impending recession. The argument is based primarily on the length of the recovery. The slow growth has not led to the severe imbalances, such as inflation or bubbles that might trigger a recession anytime soon. Finally, the slow recovery in housing starts and the drop off in exports to China have slowed the recovery in the demand for both softwood and hardwood lumber. After the initial sharp rebound, lumber demand leveled out in 2013. This combined with the drop in the Canadian dollar and the elimination of the export duty pushed lumber prices lower over the last few years. This is not likely to change much over the next few years, unless a new duty is imposed on Canadian imports later this year. Bottom Line: Sluggish Growth for Industrial Production Continues Growth is expected to improve a bit in 2017. Industrial production for manufactured goods is expected to grow again, but only 1-2%. The rest of the world is not growing very fast and is looking for places to ship their goods. There are a few issues that could significantly affect the economic performance in 2017. First, the uncertainty being created by the current U.S. election could hold down business investment and could even disrupt trade flows further. Second, there are still concerns about how healthy the China economy is, given the recent surge in non-performing loans. PC 22 PalletCentral • September-October 2016 palletcentral.com 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. The slow recover y in housing star ts and the drop off in expor ts to China have slowed the recover y in the demand for both hardwood and softwood.