ASA Advisor: Expect business-cycle decline through much of 2019
The American Supply Association’s most recent issue of the Advisor, produced for ASA members by ITR Economics, suggests companies revisit capital expenditure plans with the expectation of business-cycle decline through much of 2019.
ITR notes U.S. total industrial production during the 12 months ending in October was up 4% from the same period a year ago. ITR adds U.S. total industrial production will rise through the first half of 2019 and then production will decline into early 2020 before subsequently growing through the remainder of that year.
ITR suggests taking caution not to overinvest. Although ITR expects macroeconomic growth to be weaker in 2019 than 2018, it is not anticipating a recession severe enough to drive down employment. It adds the pace of rise will slow, but further rise in employment is likely.
ITR also suggests that businesses should plan for the labor market to remain tight in 2019 with the ability to find new employees being labeled as a challenge. ITR recommends focusing on employee retention to avoid having to locate and train qualified applicants, while also evaluating your compensation packages to ensure they are competitive enough to retain existing employees and attract new ones.