The monthly Industrial Heating Equipment Association (IHEA) Executive Economic Summary released in October investigates the role politics takes in the economy. At this time of the year, thoughts turn to elections, with the economy discussed throughout the nation. What can politicians really do to change the course of the nation's economy? The IHEA report shares a hope for 2023 and some thoughts on what politicians could do to encourage this growth.
The nation's economy spreads over diverse sectors. It's difficult to point to one area to explain the cause of the recession. Some, like the aerospace and automotive, are seeing positive growth. Other areas, like electronics and machinery, are still in a downturn. The report states, "The expectation is that GDP will expand by a very anemic 0.3% in Q3 and this will be followed by another two quarters of GDP decline (0.5% in Q4 and another 0.5% in Q1 of 2023)." After this, if the estimates play out, 2023 will see the economy growing by the end of year. Forecasts suggest that Q2 of 2023 will see small, albeit positive, growth; while Q3 and Q4 suggest significant moves to the positive.
People are holding back on spending, wanting to save something for an uncertain future. They are thinking about their jobs and are concerned for household budgets. If they could be motivated to spend, that will help the economy with substantial growth in 2023. Politicians can do something about this, according to the report.
How can the political sector make an impact? "The most useful thing the politician could do now would be to reassure the population so that there would be the kind of spending that pulls an economy out of a downturn," explains the report. "There could be significant encouragement for the process of reshoring or attention paid to worker shortage or infrastructure development." According to the report this isn't happening. It doesn't seem like the politicians are interested in taking this approach.
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 11-page report, contact Anne Goyer, executive director of the Industrial Heating Equipment Association (IHEA). Email Anne by clicking here.
