In its most recent economic newsletter, the association identified three “silver linings” amid
the financial turmoil.
Stock markets worldwide are
tanking, banks are failing and unemployment is creeping up.
Is there any good news out
there? Yes, says an economic analyst for the Fabricators &
Manufacturers Association International.
“For
starters, the threat of inflation that dominated discussions earlier this year
has faded from consideration by most,” said Chris Kuehl, Ph.D. “The price of
oil has slipped by more than $60 in three months, and steel and copper prices
are sagging. In fact, most commodities have slipped, which is good for
businesses where these costs are the biggest considerations. Of course, lower
input costs don’t help much if demand for the finished product is off, but it
doesn’t hurt to get some cost relief when the recovery begins to surface.”
In
FMA’s most recent economic newsletter, Fabrinomics, the association’s Kuehl
identifies two other “silver linings” amid the financial turmoil.
“The fact is that the labor pool is
always more shallow than preferred, and when the jobless rate is low there
isn't much to select from,” he said. “The unemployment rise puts some
talented people on the market, and that allows smaller companies to have access
to people only larger companies were able to recruit in the past.
“There also are more grateful
employees in a downturn, and this can lead to productivity gains,” Kuehl added.
“In fact, the level of productivity in the U.S. has risen in the past few
months. It is not that business wants to see economic stress visited on their
employees and others, but when times are too good and for too long, the culture
of work changes, and not always in a good way.”
The final piece of silver is still
to come, the economist said.
“The third positive will develop as
banks lick their wounds and figure out how to get re-engaged,” Kuehl said. “The
winners are going to be the traditional banks that didn't risk that much in the
weird credit markets. They were and are ‘relationship banks,’ and will be
getting more engaged in that kind of old-fashioned business. Companies with
good relationships with their banks are going to be in a good position if that
bank is one of those that managed to stay intact.
“The absurd behavior of the boom
has left a lot of damage, but there are islands of sanity that will now start
to hold their own,” he added.