Now is the time to invest in your fastener company, economist Alex Chausovsky told the National Fastener Distributors Association.

Expect 2021 to be a year of economic recovery and positive business cycle, Chausovsky of ITR Economics said in a virtual presentation to the NFDA. Looking ahead, 2022 will be the “backside” of the economic cycle and 2023 will have expansion, but at a slower pace, he forecast.

His economic outlook is “very positive” and he encouraged “aggressive” investment in your company. Low interest rates encourage investment now, Chausovsky added.

He dismissed the pandemic recession of 2020 as “uncharacteristic.”

Late in the decade will be a depression, which ITR has been forecasting for years. This year’s $3.1 trillion deficit and growing national debt and changing population will be factors in an upcoming depression, he warned.

The U.S. economy is stronger than many people give it credit for.  

Most leading economic indicators declined due to the pandemic in Q2 of 2020, but “now all of the indicators are rising,” Chausovsky pointed out. U.S. industrial production is especially strong.  

The U.S. fairs far better than China, Mexico and Vietnam on risk factors, Chausovsky said. Europe has the disadvantage of being more expensive and other countries have higher supply chain risks.

U.S. employment is strong. Unemployment is primarily in the hotel, travel and retail industries and “not manufacturing,” Chausovsky emphasized.

American citizens’ disposable income has gone up and the “U.S. consumer is in a strong financial position.”

Americans have been “buying goods rather than services,” Chausovsky explained. Expect expansion of spending through the end of 2023.

Among the strongest industries this year: Single-family housing and heavy duty trucks.

Single-family housing “is on fire now” and usually leads economic growth. Non-residential lags and most recently was down 5.2%, Chausovsky explained.  

Single-family housing was up 12.3% and is likely to rise 20% this year.  Multi-family housing is “overbuilt,” Chausovsy said.

OEMs are reporting solid growth at 9.6% in the past quarter. U.S. new machinery orders are up.

The defense industry – driven by congressional spending – has reported strong growth for the past four years and will likely continue, he forecast.

The electronics industry has benefited for the “work from home” response to the pandemic.

Now is the time to spend on your business. You need to hire salespeople now. 

“You cannot wait for business to come to you,” he advised.

For your business you should be asking, “Where are the bottlenecks?” in your business and invest in efficiency. 

“Automate, automate, automate,” he advised.

“What do you wish you’d done in 2010?” is a question for now, Chausovsky said. Consider investment in acquisitions, adding products to sell and in efficient processes.

Expect U.S. infrastructure spending based on political pressure.

There are price increases and some suppliers are changing from 30-day price quotes to 10 day, he finds.

The U.S. economy is stronger than people realize, he said. 

“Take advantage of other people’s pessimism. Now is the time to act,” Chausovsky declared. Web: nfda-fastener.org