Be prepared to pay more.
That was part of the message Wednesday from Dr. Jeff Dietrich. The senior analyst at ITR Economy presented at the GlassBuild Glazing Executive Forum, giving attendees an outlook on the economy and what it means for employers in the industry.
“Whatever you are proposing for the future, plan on higher wages,” Dietrich said.
Dietrich’s outlook on the economy was mostly positive, as it continues to see steady growth.
He says as a country, people in the U.S. are much more measured in making decisions now as opposed to 2006-2008, so it’s not necessarily fair to compare the state of the economy from now to then.
“The economy is growing, but it’s growing at a slower pace,” he said, noting that “the fundamentals of this economy really are intact” and that “we are the only economy in the world that has been growing for four and a half years.”
In the recovered economy, wages are rising, and Dietrich said that because of the competition for finding skilled workers is becoming tighter, it’s important for companies to be proactive.
“You need to be hiring ahead of the game,” he said, “not with the game.”
Other factors Dietrich discussed included the stock market. His firm thinks the recent activity in the S&P500 is a “correction,” not a “collapse.”
Still, while leading indicators of the economy are positive, “reviews are mixed.” One variable he noted is that the world economy which is struggling to stabilize.
Additionally, he pointed out that by 2025, social spending and the U.S. debt will be larger than the country’s defense budget.
In terms of the construction industry, the Architectural Billings Index shows 5 percent growth in total nonresidential construction, with the outlook for 2016 lower at 2.1. “Growth is growth,” he said.
Most sectors in the nonresidential sector are back at 5- to 7-year highs. Hospital construction, he said, saw a pause with the passing of recent healthcare legislation but is now speeding back up.
Finally, Dietrich advised businesses to embrace e-commerce and to effectively respond to the demand for quicker and more precise lead times.
Now, more than ever, he said, “it is critically important in the mindset of your customers that what you promise, you deliver on time.”
Stay tuned to USGNN.com™ for continued coverage of GlassBuild.