For the fastener industry, 2017 will be a low growth year and 2018 will yield bigger profits, economist Bill Conerly told the joint session of the National Fastener Distributors Association and Pacific-West Fastener Association.

The import / export business was once 4% of the economy.  It is now 16%.

Take a factory tour in the U.S.  The factory equipment may be from Sweden.  The assembly may include parts from China. Pulp for the boxes may be from Idaho.

Conerly suggested conferees look out their Long Beach, CA hotel room windows and see the second-busiest U.S. port for an idea of the impact of world trade.  Long Beach handles 6.8 million 20-foot containers (TEUs) annually on the port with 80 berths and 66 cranes.

Current uncertainties in the economy are how far President Trump will go on taxing U.S. plant relocations, tariffs and “jawboning.”  Conerly suggested Trump will push to “the edge, strike a small deal and declare victory,” before starting trade barrier wars.

Workers will use fake documents for jobs, Conerly predicted.  Otherwise buildings won’t get built.

Conerly said 17% of agriculture workers are undocumented, 13% in construction, 9% in the leisure/hospitality industry, 7% in business and services, and 6% in manufacturing.

Construction is cyclical, manufacturing moderately cyclical and MRO relatively stable, Conerly finds.

 • In 2008 the whole economy was “off track” and people still feel it is “fishtailing,” he said.

 • With an impending worker shortage as Baby Boomers retire, companies will need to focus on retention in addition to recruitment.  In 2017  the median boomer is age 60 and median millennial is 27.

Boomers can be encouraged to work more years if the job provides “a sense of purpose, social interaction, six weeks of vacation and low stress.”

There is going to be stealing workers from other employers.  Urban employers will be recruiting from rural areas.

Employers need to understand that people work for take home pay – not gross pay. 

 • Obamacare may be repealed, but health care has to continue and it is a matter of cost shifting, Conerly suggested. 

 • Taxes will not be overall simplified, Conerly predicted.  

“Congress likes tax complexity.  It is part of getting re-elected.” 

Members of Congress can put on a show with “hearings.”

Democrats in the current Congress will stop major changes – though there will be some simplification – and special interests will protect themselves.

 • Conerly posted graphs showing violent crime steadily declining, air quality getting closer to national standards, and world poverty is dropping.

The food for a larger population is now being grown on 40% of the farm land of 1960.

 • Conerly predicted more write-offs of student debt because it is “politically popular.”

Conerly posted a picture on the screen with a runner taking off from starting blocks.  “She knows where she is going,” Conerly said of reaching the finish line tape.  “When you are a leader in your organization, where is the tape?”

For the next decade, Conerly advised the NFDA and Pac-West members to “re-optimize for a more cyclical economy; save more; retain your good workers; experiment with keeping seniors on the job; look for alternative talent pools; and be ready to change suppliers.  Web: nfda-fastener.org or pac-west.org