Economy

Dr. Kuehl: Does Business Have a Friend in the White House?

March 14, 2017

The election of President Donald Trump uncovered a wound that has been festering for many years with both Democrats and Republicans in the White House.

At the recent Fabricators & Manufacturers Association, International (FMA) annual meeting, Dr. Chris Kuehl of Armada Corporate Intelligence had this to say about the Obama Administration, “The frustration was we had an administration that was at best ambivalent to business to at worst downright hostile.” He pointed out that the Bush Administration before Obama was not much better.

The question we need to ask ourselves now is, as a country “how patient are we?” The United States has always been a nation of instant gratification and that is not how politics and governance works.

We are only 50 days into the Trump presidency and there are already rumblings as to who and what the likely “winners” are going to be as well as the “losers.”

Dr. Kuehl, who, by the way, will be addressing the 7th Steel Summit Conference on August 29th, pointed out that many of the economic indications used to evaluate the economy are quite strong. The U.S. ISM Purchasing Managers Index (PMI) is well above 50 indicating a growing construction sector. The Combined Monthly Index (CMI) is also encouraging.

He believes the current recovery, which is 102 months long (2009-2017) “should be relatively long-lived” with the longest streak being 120 months set in 1991-2001.

He pointed out a number of trends that we should be worried about:

•   Workforce participation – is at the lowest levels since the 1970’s. there have been steady declines since the Great Recession.
•   Labor productivity – falling over the last three years.
•   Protectionism – is this just a short-lived political phenomenon? US depends on exports for 14% of GDP.
•   Skill gap – too few people with the skills needed.
•   Watch out for higher interest rates, inflation and the strengthening of the dollar.

We will hear much more from Dr. Kuehl at our upcoming SMU Steel Summit Conference. Dr. Kuehl will be our first keynote speaker on Tuesday, August 29th.