A year of recovery and growth?
Perhaps it’s just the traditional start of the year optimism, but it’s hard to miss the growing chorus of predictions that 2012 will be a year of recovery and economic growth.
Following the bursting of the prosperity bubble in 2008, the recession and the trough that persisted for three years, perhaps it’s time for the optimists to come out of hibernation. It seems, however, that optimists are doing more than singing “High Hopes,” they’ve got some solid evidence to support their confidence.
Economists Alan Beaulieu and Brian Beaulieu, CEO and president, respectively, of the Institute for Trend Research, see several positive signs that a recovery is near. Those factors include:
• Positive rates of change in global industrial production, retail sales, commercial and industrial loans at commercial banks
• Improving employment numbers
• Decreasing rates of change in delinquency rates for commercial and industrial loans
• Some upticks in housing starts and the Purchasing Managers Index
U.S. income levels are also increasing, rising in December by .5 percent, the largest increase since last March, according to the U.S. Department of Commerce.
Increased confidence is also being shown by the more than 1,600 CEOs who participated in the most recent Vistage CEO Confidence Index Survey. That survey, taken in December with results released in early January, showed that executives not only believe that 2012 will be better than last year, but that the U.S. economy will be the most improved in the world three years from now. Among the encouraging findings in the survey: 55 percent of CEOs expect to hire additional employees this year, 42 percent plan to invest in new plants and equipment, and 55 percent expect increased profits.
Whether the Vistage forecasts pan out depends in no small way on the CEOs who made them. If CEOs invest in new facilities, if they hire new employees, if their strategies increase revenues, then 2012 should be a better year for all of us.
There are no guarantees, of course, that we’ll go from singing “High Hopes” to “Happy Days Are Here Again,” In fact, Alan and Brian Beaulieu see signs of a small recession on the horizon in 2014. But one thing is for certain: If CEOs sit on the sideline, the recovery will be slower and weaker than we’re hoping for.
Let’s launch our own recovery — now!
In early 2009, soon after President Obama took office, I wrote in our newsletter an article titled “A Year (or Two) Like No Other.” The premise was, of course, that the financial sector meltdown we experienced in 2008 was unlike anything most of us had experienced, and that there was no telling how well we would pull out of it, or how long it would take
My advice then was that businesses should take stock of their position — figure out where they stood, decide where they wanted to go, and develop plans to move in that direction. The reasoning behind my advice was simple: it’s more often better to be ahead of the curve than behind it, better to get to your destination before the competition does.
While I’m confident some businesses did develop plans to move forward, to anticipate the realities of “the new normal” in their industries, it is painfully evident that many have not.
It’s no secret why hundreds, even thousands, of businesses have stopped trying to plan for their futures. They’re losing confidence in the ability of our government — the members of the House and Senate and the president himself — to agree on solutions that will restore some semblance of prosperity to our nation. The near-stalemate of the increase of the national debt ceiling resulted in an unprecedented reduction in the government’s bond rating. Recent polls have shown that President Obama’s popularity is lower now than at any time since he was elected, but Congress is even less popular.
The finger-pointing that has gone on in Washington for the last two years has gone beyond the point of foolishness. It’s clear to all of us outside Washington that everyone inside the Beltway must share the blame.
Where does that leave us now?
Well, the president has put a new jobs program on the table, and it contains many elements that both Democrats and Republicans have supported in the past. We hope that Congress now realizes that it must do something, without all the partisan bickering, to create jobs and move the economy forward.
And what if they don’t?
We’ve heard over and over from much of the private sector that we cannot count on government to bail us out when times get tough. If that’s so, then the private sector must resolve to act on its own. Business owners and bankers, talk to each other. Businesses with plans for growth, supported by banks that show confidence in them, can launch their own recovery. If you’ve got a plan, start now. Get out ahead of the curve, and reach your goal while the competition is still thinking about what to do.