Tag: Future Trends

Part II: Trends Challenge the Material Handling Industry

Today we continue our post on future trends that will challenge the material handling industry. Please see our June 6 post for Part I.

  1. Workplace. The workplace is already changing with a growing number of workers telecommuting and working from home. The traditional brick and mortar office is giving way to mobile and virtual offices. Computers, cell phones, teleconferencing and video conferencing allow people to do business with clients, colleagues and suppliers around the world from any location, including their kitchen table. Nearly 750,000 people already live and work out of their RVs. The blurring of home and work boundaries is already starting to impact how we work and our expectations about work.
  2. Biotechnology. Genetics, biotechnology and nanotechnology are the world’s new industrial frontier. Scientists are creating undreamed of organisms and compounds that are revolutionizing our world, and all in ever more minute packages. Every year brings profound discoveries that will force us to redefine the role of industry, how we produce and use materials, and the role of workers.
  3. Globalization. A global economy is a growing reality. World markets are becoming increasingly interconnected. To be successful, businesses will have to look beyond local and regional resources to take advantage of market opportunities around the globe. As this occurs will the pressure of business and industrial inter-reliance have an affect on political, economic and social issues around the world. It seems certain that opportunities for global influence and change will be created. The challenge will be to see that they are positive ones.

Recession Over but We’re Not Out of Woods Yet

Today’s headline blared: “Recession officially ends, with trepidation.” Ain’t that the truth! In officially declaring the recession over, the U.S. Commerce Department cited a 3.5% growth in the economy. Encouraging, certainly. Something to cheer about? Apparently Wall Street thought so as the Dow Jones Industrial average shot up nearly 200 points. But the guy or gal on the street? Maybe not so much. The effect seems more psychological than actual. Economists caution that much of the 3.5% increase in gross domestic product was fueled by the government’s Cash for Clunkers program and first-time homebuyers tax credit. Whether those programs have created an unnatural spike in economic growth that can’t be maintained or the economy really is finally throwing off the chill of recession, only time will tell. But until unemployment decreases, most analysts agree we’re not out of the woods yet.

Getting people back to work is the real challenge now. People aren’t going to start buying again — the necessary trigger for real economic improvement — until they have jobs and can stop worrying about keeping food on the table and a roof over their heads. And the jobs won’t be there until American businesses feel comfortable financially. A bit of a vicious circle: consumer purchasing fuels businesses which fuel jobs. Traditionally, small businesses provide the greatest potential for U.S. job growth; so it was interesting to read the results of the American Express OPEN Small Business Monitor bi-annual survey in Manufacturing & Technology eJournal.

Here are some of the survey highlights:

  • 51% of manufacturers have a positive outlook, about the same as last year (52%)
  • 61% are experiencing serious cash flow difficulties, compared to 47% a year ago
  • only 22% plan to hire additional employees, down from 30% six months ago 
  • only 36% are planning capital investments, down from 59% in 2008
  • 68% think U.S. economic woes are far from over

DJ Products would like to know what you think and how your business is coping with the recession.

New Trends Will Affect Speed, Strength of Economic Recovery

The heart monitor on the economy has started beeping again, apparently shocked into recovery by the dual application of bailout money and stimulus funds. Of course, there’s still concern that the cure may prolong the patient’s recovery but the big guy does seem to be on the mend. Many economic analysts are now predicting that true recovery from the recession may begin as early as next quarter, that’s six months to a year ahead of previous predictions. Naturally, there’s disagreement about the strength and speed of the economy’s recovery. “The question is whether we are transitioning to a solid growth period or to something flatter,” explained Dr. Chris Kuehl, economic analyst for the Fabricators & Manufacturers Association International (FMA), in the FMA economic newsletter Fabrinomics.  

Kuehl pegs the strength of the economy’s recovery to three emerging trends that manufacturers and businessmen will need to factor into their plans as they position themselves to compete in the post-recession market:

  • Cautious consumers. High unemployment and the continuing threat of job loss has made consumers wary of spending and further depleting any financial reserves they have left. Most economists expect consumer spending to lag other signs of recovery, further slowing the recovery process. Until unemployment rates return to post-crisis norms and consumers regain confidence in the economy, demand for goods and services is expected to remain low.
  • Consolidation. Financial chaos has forced mergers and acquisitions in the U.S. and around the world, and not just in the automotive industry, Kuehl points out. Manufacturing bases have gone global, shifting from the U.S. and Europe to Asia, particularly China, and Latin America. Digging a toehold into these markets will be essential — and extremely challenging — if manufacturers, especially smaller players, are to survive. The complexities of global business may encourage even more consolidation as small manufacturers partner with larger ones or form cooperatives to gain global access.
  • Unsettled financial markets. While banks and financial entities took the brunt of the first blow, they haven’t carried the burden of the economic crisis. Even so, they are still recovering which will continue to make them wary of lending money. The yet-to-be-known impact of new government oversight and regulation will also be a factor. Kuehl sees a return of the “old-school banker” with tougher credit standards, demands for greater cash flow, and less money available for growth and expansion.