Well, as we approach the end of November 2020 and assess the economic numbers from October, there is still no real clarity to bring a sense of understanding to our crazy year. As the Industrial Heating Equipment Association’s (IHEA) Executive Economic Summary’s October report begins, “To note that there is nothing about this year that could be considered even close to normal or predictable would be the understatement of the year, if not the decade. This was the most unanticipated and bizarre recession experienced in modern history as it was not organic in any sense. It was an imposed recession that resulted from the attempt to deal with the pandemic and all the numbers for the year have been skewed to the extreme.”
However, the reports states, “This month’s indices are far better than they were a month or so ago, but almost every one of these data points demands an explanation before we have an idea what they might be telling us about the economy.” Of the 12 indices examined, nine of them were trending positive and only three were heading downward. Interestingly, though, “that only tells part of the story.”
For example, take the data for housing starts. The summary states, “The index showed a decline, but the news has been full of very positive reports on the state of the housing sector. The index shows both the data on single family homes as well as the multi-family unit and there has been a reduction in interest in the apartment option of late.” Additionally, the demand for both single-family and existing homes has been very robust.
The auto sector has also seen interesting movement. RV sales have “never been stronger and the demand for larger vehicles has been strong as people intend to travel in them.”
“There have been several trends emerging over the last few months and the data in these indices reflect them.” The report continues, “The most obvious and expected has been the shift in consumer interest from service spending to buying goods.” Those sectors that have benefitted the most from the shift have been manufacturers, transportation companies, and importers. “The bulk of these purchases have been online and that has spurred dramatic growth in the parcel delivery sector.”
While the U.S. still doesn’t compete effectively in the production of consumer goods, “there has been an increase in demand for the sophisticated machines the US produces – especially in the realm of robotics and technology.”
In conclusion, the reports shares, “The early indicators as far as the economy is concerned continue to be transportation and the credit environment and, in both cases, there is renewed confidence regarding the future. The unfavorable numbers (such as bankruptcy and collections and disputes) have stabilized.”
Check out the full report to see specific index growth and analysis which is available to IHEA member companies. For membership information, and a full copy of the 12-page report, contact Anne Goyer, executive director of the Industrial Heating Equipment Association (IHEA). Email Anne by clicking here.
Executive Director of IHEA
