Tuesday, January 17, 2012

How I See It: State of the Economy 2012

I preface these comments with three qualifications – one, I am typically a “glass-half-full” personality; two, I’m not an economist (I don’t even play one on TV); and three, I’m assuming that there will be neither a Eurozone economic meltdown nor significant instability in the Middle East.

Given that, I see a rosier business environment in 2012 than what the mainstream media seem to be embracing.

· Consumer confidence is positive and rising.

· Unemployment claims and rates are declining.

· Over 200,000 private sector jobs were added in December, of all months.

· Manufacturers report increasing backlogs and plant capacity utilization.

· Banks are competing again for opportunities to finance business growth.

Yes, there are some tricky issues that still need to be addressed. One of them appears to be an imbalance between available workers and the skillsets needed by employers, especially manufacturers. We’ve often discussed manufacturers’ workforce development challenge here. But many worthwhile efforts are attempting to bridge this gap. Second Chance Partners, an alternative education organization that pairs schools and private industry to create manufacturing apprenticeships for students who are struggling in the traditional high school environment, is a notable example.

As 2012 unfolds, I see prudent businesspeople taking advantage of this increasingly favorable environment. They will begin to reinvest for marketing and sales – not only for customers but also for recruiting the skilled employees they desperately need; they will take advantage of very low interest rates to upgrade if not expand their production facilities; and they will make sure that they take extra-special care of their current employees.

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