Saturday, August 21, 2010

Double Dip?

Back in May I blogged about my tendency toward pessimism and that even though the economy seemed to be in full recovery, I wasn’t falling for it. I said it was temporary and “things would go wrong and all will suffer”. We are not there yet and I don’t think it will get that bad, but the outlook is not great. Even a pessimist like me was feeling pretty good about things back in May. Not so today.

Headhunters have the opportunity to speak with a broad cross-section of industry professionals. Our firm specializes in transportation, logistics and supply chain management professionals. Those are the people we talk to. While we can’t predict GDP for the next quarter or the next year, we can tell you what’s going on today. We take the economy’s pulse everyday.

Based on feedback from various sectors and regions, here’s my take on the economy. Freight volumes have softened considerably this summer, but the economy is doing better than the headlines would lead one to believe. There is a shortage of qualified people. That’s not for all positions in all parts of the country. But, a significant number of our clients are having trouble filling positions. Obviously, we are getting biased information in that we will tend to have more communication with companies who need our services.
But compared to 2008 and 2009, it’s tougher to find qualified people. Capacity will be an issue when the economy does improve. It would not take much of a bump for us have real problems moving freight.

The political climate has everyone frustrated. Uncertainty about taxes and getting government spending under control are doing more to inhibit economic growth than anything else. Throw in health care, immigration and environmental issues and it’s easy to see why businesses are holding back on new investment and expansion. Pre-recession hyper-consumerism is gone and not coming back for a while. Less is more and it’s cool to be thrifty.

I don’t see anything that will drive a robust economic recovery. We are facing long-term issues that will negatively impact disposable incomes. However we get there, we must deal with federal, state and local budget deficits. We must upgrade our infrastructure. The status quo is not an option. The types and use of energy must change. The status quo is not an option there either. It’s time to pay up. But it was fun while it lasted wasn’t it?

Double dip? Probably not. A chicken in every pot? Likely. A McMansion in your future? Dream on.

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