By Brian Feehan, President, ITA
With no shortage of headline-grabbing news from Washington, DC; “Will the Federal Reserve Raise Rates? Will Congress Pass a Debt Ceiling Increase and Negotiate a Budget? Will US Foreign Trade Policy Initiatives Pass Congress? Will Presidential Election Politics Gridlock Washington?”
Some of these headline questions have been answered – Congress passed a debt increase and a budget. Presidential politics always creates more gridlock. The remainder of these questions are yet to be seen but certainly have the potential to affect business.
The US economy has witnessed some stability in the market over the past twelve months. One contribution to that stability has been the reported stronger real GDP growth earlier this year. The estimate of growth in the US economy was revised sharply higher, up from 2.3% in the original estimate to 3.7 percent in the August report. This reflected better consumer and business spending data than previously thought.
The Labor Department says the U.S. economy added 142,000 jobs in September, a figure that fell short of expectations but nonetheless appeared to shrug off turmoil in overseas markets.
Our economy has now added 8.0 million jobs over the past three years, a pace that has not been exceeded since the year 2000. In a separate survey, the Labor Department’s Bureau of Labor Statistics said the unemployment rate had dipped to 5.1percent – a seven-year low.
There are even some areas of the country that report unemployment in the 3 percent range, which could mean that anyone who wants a job – has one. And while the economy added jobs at a somewhat slower pace than in recent months, the unemployment rate remains at its lowest level since April 2008.
Overall US manufacturers are still seeking a stronger recovery and data releases issued at the end of August provided mixed news about the state of the sector right now. On the positive side – new durable goods orders rose 2.0 percent in July, continuing the 4.1 percent jump in June. Much of the gains have come from the transportation equipment sector, and excluding that segment, new orders increased 0.6 percent in July.
However, reduced crude oil prices, the strong dollar and weakness in certain markets around the world could be seen as taking their toll on demand and production for export products. The US Department of Commerce recently reported that the trade deficit fell to its lowest level in five months in July, down to $41.9 billion from the revised $45.2 billion figure for June. However, it is important to note that the trade deficit is running 3.6percent above last year’s level, reflecting weaker export sales.
The October Purchasing Managers Index (PMI) registered 51.4 percent, an increase from the 50.7 percent in September. It is important for us to recognize this report does not track hard data but the present situation in a number of industries derived from a survey of purchasing managers from those industries. A reading over 50 from those surveyed indicates that a majority reported that conditions in their industry are improving.
Automobile sales continue to be a bright spot in US manufacturing. A senior analyst raised their 2015 sales forecast to 17.72 million vehicles from 16.8 million after July sales numbers were calculated. The industry’s record is 17.4 million cars and light trucks, set in the year 2000. The automotive industry appears to be healthy again.
While there has been some recovery in housing starts or new homes that have been built, the number of new homes being built have not returned to pre-recession levels.
US Forklift Industry
The North American lift truck industry has recovered nicely from the recession in 2009. Retail orders for all five truck classes in 2014 were approximately 214,000 orders, which almost reached our pre-recession level of 215,000 units. When considering where we were in 2009 with only 98,000 units, our industry in North America has rebounded quite well and can be characterized as mature and healthy.
This year has been another strong year for our industry as each month so far has either equaled or been stronger than the corresponding month from last year. Overall through August, the North American industry is up over 10 percent year-to-date compared to last year.
Our latest ITA Membership survey for 2015 results show approximately 220,000 retail orders are expected for 2015. This would represent a record for our industry, demonstrating the strong recovery our market has enjoyed.
The ITA priorities remain:
• International cooperation on standards development
• Promoting free/fair trade
• Engineering practices
• Accurate & timely statistics
• Industry communications & networking
• Continuation of our OSHA Compliance Officer Training Program.
In addition, the continuation of National Forklift Safety Day, which was a new initiative the ITA launched in 2014, will continue to be supported each year. National Forklift Safety Day is held on the second Tuesday of June, and serves as a focal point for manufacturers to highlight the safe use of forklifts, and importance of operator training. This day provides an opportunity for the industry to raise awareness and educate customers, policymakers and US government officials on forklift operating safety practices.
Recognizing one of the ITA’s fundamental priorities is communication and safety, we launched National Forklift Safety Day. We are determined to use this day as an opportunity to address critical priorities concerning forklift operator safety through improved education and training. We welcomed speeches from influential members of Washington and also industry experts during our event which was held in Washington DC.
It was through ITA Member outreach efforts and the efforts of our official media sponsor, that we are able to generate a considerable amount of media coverage related to this event, which included circulation numbers from all of the media outlets exceeding 60 million.
Support of trade policy initiatives that create a level playing field and support US manufacturing and growth continues to be a priority for ITA. In June this year Congress passed the Trade Promotion Authority (TPA) bill and was signed into law by the president. US TPA legislation updates and renews the longstanding executive-congressional partnership to promote market-opening trade agreements. This legislation sets forth trade negotiating objectives and puts in place new procedures to ensure that the negotiators are held accountable and share information with Congress and private-sector stakeholders. Ultimately, TPA enables the United States to negotiate trade agreements by ensuring an up-or-down vote on a final trade agreement. This legislation will now be put into practice as the Trans-Pacific Partnership (TPP) trade negotiations have concluded with the 12 nations involved agreeing to the terms negotiated.
The congressional debate on TPP, the Federal Reserve and a host of other policy debates will certainly continue to generate significant headline news and all have potential impacts on our industry. Coupled with the full swing of the presidential election process and 2016 is already shaping up to be an interesting year.