Checking in: Sustainable recovery is under way

HomeEditorialsChecking in: Sustainable recovery is under way

by Steven Feldman

I’ve never been a fan of economists. Talk to 20 of ’em and you’re likely to get 20 different opinions. I put them one rung above weather reporters. Except one.

Alan Beaulieu is a principal at the Institute for Trend Research. He claims to have a 96% accuracy rate when it comes to predicting turning points in the economy. I can’t vouch for that, but I can tell you that four years ago I listened as he predicted that the United States and its global partners would be heading into a deep recession, including a stock market correction. This forecast differed greatly from mainstream economists, including those at the Federal Reserve Bank. His premises are sound, based on historical trends, the political agenda of the party in power and other current dynamics.

Bottom line: Like E.F. Hutton, when Beaulieu talks, people listen. So if you’re wondering what the rest of the year will look like from a business standpoint, read on.

Beaulieu believes we are currently in a state of a sustainable recovery with continued mild improvement on the industrial side. He predicts a modest rise in consumer spending in 2010 followed by a 20% increase in demand in 2011, spurring higher oil and gas prices.

Therefore, 2010 is the time to accomplish the following activities:

  • Refine business and manufacturing procedures.
  • Correct work flow and manufacturing bottlenecks.
  • Purchase and upgrade equipment.
  • Build team capacity through cross functional training and team development.
  • Resolve business culture problems to improve team morale and productivity.
  • Get the core business functions in alignment.
  • Spend money on marketing and advertising.

These activities, Beaulieu says, need to be funded now. In doing so, prepared companies will be ready for 20%-plus growth due to increased consumer demand and reduced competition from businesses that did not prepare.

Beaulieu also predicts inflation will rise in 2011. This means interest rates will increase with demand. Therefore, businesses that are upgrading now are doing so with lower-cost dollars.

With that said, this is a great time for businesses to expand. The past two years have been brutal for a significant number of companies, many of which still do not see any light at the end of the tunnel and are ready to sell or lock the doors. This means businesses will be up for sale or competition will decrease at a time when values are at an all-time low. Purchasing existing operations makes sense when business functions are aligned.

Beaulieu also advises that unemployment data is overblown and should not be considered an economic indicator. That’s because unemployment lags so far behind the performance of an economy. Makes sense. We are seeing slow employment recovery in an otherwise improving economy. Industrial production in America has turned the corner. The manufacturing index is up and GDP is strong—all reasons for optimism, at least in the short term.

Long term, Beaulieu fore- casts that we will enjoy a strong 2011 and 2012 with things slowing down in 2013 followed by a mild recession in 2014 with a recovery in 2015.

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