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Dr. Chris Kuehl
Author of Fabrinomics
Not Living up to Expectations
In a few weeks I will engage in that annual ritual of embarrassment referred to
as an economic forecast. Even though we know that predicting more than a few
days in advance can be futile, it is the job of the economist to try. The hope is
always that the coming year will be the one that behaves as it is supposed to.
Right now, here are three reasons the year 2015 did not shape up as expected.
The first broad surprise was the performance of the
global economy. The U.S. was expected to start
the year somewhat slow, although not as slow as
2014 had been. That panned out pretty much as
expected with the harsh winter taking its toll again.
What was not anticipated was the extent of the
Greek crisis in Europe. It was not expected to be
as dramatic or to last as long as it did, and the U.S.
was not expecting the blowback. The next big global
impact was the rapid decline of the emerging market
economies as Brazil was suddenly on the brink of
collapse while China started to slow down as early as
the end of 2014. This took the wind out of the global economy’s
sails, and even a resurgent U.S. could not counter the collapse.
The strength of the U.S. dollar had more to do with the weakness of
the other currencies than anything the U.S. did. For the most part, the rest of the
world slipped and that took the U.S. down more than expected.
The second broad surprise was the collapse of the energy sector. Oil prices started
to dip toward the end of 2014, but it was assumed that this would be a temporary
setback as oil gluts never last long. Producers would cut back and prices would
rebound. Neither ever occurred. This has kept oil prices very low for far longer than
anyone expected. The impact on the economy has been mixed. The expanded
retail activity that was expected due to low fuel prices has not taken place, while
the impact of the low oil price has indeed been felt. It is not clear at this stage if
2016 will be much different as far as the oil sector is concerned, but low prices for
oil and fuel have definitely slowed the progress of the domestic economy in 2015.
The third reason 2015 has been less robust than expected is the slow response of
the job market — something that should have changed by now. The unemployment
rate of 5.1 percent looks pretty good — the best since the recession started.
The problem is that there are other ways to look at the job situation, and these
measures are not so rosy. The U- 6 rate of joblessness is still 10 percent and high
by historical standards. The rate of workplace participation is as low as it has
been since the 1970s, and the quit rate is not yet at normal levels. The bottom
line? Still far too many people are out of
work, and with every passing month many
of them put even more distance between
today and their last job. Most manufacturers
would hire if there was somebody they felt
Many expected events took place this year. The economy grew once it got past
the worst of the first quarter. The latest estimates from the second quarter have
been improving with each revision, and the third-quarter data has looked decent
as well. There is nervousness about the fourth quarter as the consumer has yet
to show real enthusiasm despite better job numbers and some reduced prices
due to lower-cost imports.
So now we know what went wrong with the 2015 forecasts and we can only
guess at what will make 2016 work as expected — or not. Stay tuned for my
2016 forecast in the January issue.
would hire if…
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NBT Seeks Donated Items for
Its Annual Silent Auction
The Nuts, Bolts & Thingamajigs® first
fundraiser of the year will take
place during FMA’s Annual Meeting
in February at the Paradise Point Resort
& Spa in San Diego. The annual silent
auction offers a wide range of goods and
services that are donated each year, making
this one of the most interesting fundraisers
The 2015 auction raised more than $21,000
for the foundation. The auction items
included a wine club membership, custom-
designed and -fabricated wine storage rack and clock, and a restored antique radio, as
well as a plethora of autographed sports memorabilia and a custom guitar.
Consider donating an item to the 2016 silent auction. It is an excellent way to promote
your company while simultaneously supporting a great cause. 100 percent of the
proceeds support the scholarship and summer manufacturing camp programs of NBT.
Scholarship Program: Twice a year NBT awards scholarships to deserving men and
women who pursue training leading to careers in manufacturing. The applicants are
reviewed by a panel of industry professionals, educators, and company VIPs who
evaluate and score the applications to determine the winners.
Summer Manufacturing Camp Program: Each summer the manufacturing camp
program exposes hundreds of students ages 12-16 to manufacturing technologies
and careers with hands-on, weeklong programs at community colleges. Grants are
awarded to these colleges based on curriculum, location, and facility capabilities with
a thorough application process.
Get involved today! Request a silent auction donation form from firstname.lastname@example.org.
More information about the Annual Meeting can be found at fmanet.org/annualmeeting.
NB T is the charitable foundation of the Fabricators & Manufacturers Association. All donations to this 501(c)( 3) are tax-deductible.
Your leading educational resource
The auction items in 2015 were a hit with everyone that attended.