Aluminum companies should use a slow 2014 to upgrade, expand
and make new hires to gear up for boom times in the following
years, one economist said at a recent Metal Service Center
Institute (MSCI) aluminum products division conference in Palm
Next year will be
"off" compared with 2013 as demand slackens from the middle of
2014 into the first quarter of 2015, said Alan Beaulieu,
president of the Institute for Trend Research, a Boscawen,
"If you project your
growth is going to be the same as it was 2013, youre
going to be wrong," he said.
wont fall into a recession, but Brazil and Europe will,
Beaulieu said. "The world will soften ... and it will impact
(the aluminum) industry," he said.
contrasted with several aluminum industry executives who voice
optimisim about 2014 (
amm.com, Oct. 28).
While the automobile
industry is seeing solid growth in 2013 compared with 2012, it
wont be immune to the slowdown, Beaulieu said, predicting
automobile production in 2014 will be 6.3 percent below this
Industries as diverse
as metalworking machinery, consumer durables, truck trailers
and medical equipment are also expected to slow in 2014,
Beaulieu said. The only exception is aerospace, which is
expected to grow 7.8 percent in 2014, he said. "Orders are in.
And the downturn doesnt look like it will be significant
enough to cause a large number of cancellations."
Once the 2014 slowdown
subsides, the U.S. economy is poised for a bull run from 2015
into the first half of 2018, Beaulieu said.
That period will
benefit from energy independence in the United States resulting
from the shale oil and gas boom, the expansion of the Panama
Canalwhich will create jobs on the U.S. East
Coastand the U.S. Federal Reserve continuing loose
monetary policies aimed at bolstering growth, Beaulieu
In addition, U.S.
consumers have deleveraged and are spending, U.S. manufacturing
is again globally competitive and "near-sourcing" jobs, and a
free trade agreement between Canada and the European Union (
amm.com, Oct. 22) should also spur growth in the
future, he said.
But bank lending is
slowing in part because of increased regulation resulting from
policies such as the Dodd-Frank Wall Street Reform and Consumer
Protection Act at the same time interest rates are expected to
rise, Beaulieu said. "You need to go out there and borrow money
nowthis yearand not wait until 2014," he said.
Another problem will be a lack of skilled labor, Beaulieu said,
predicting that "bidding wars" for qualified workers will lead
to wage inflation.
"You need to be using
2014, an off year, to get ready for whats coming on the
other side," Beaulieu said. That might mean expanding,
acquiring key staff, de-bottlenecking or making acquisitions,
he said. "Whatever your constraint is ... fix it in 2014
because you are not going to have time in 15, 16,
17 because of all the right things going on in this
Still, Beaulieu cautioned that a "significant downturn" is
coming in 2019 as current loose monetary policies return to
haunt the economy in the long-term. "Were going to have
to pay a price for that. Massive amounts of currency is being
created by central banks around the world, and its the
fuel that is going to touch off inflation," he said, predicting
an inflationary business environment not seen since the