“There is a good bit of optimism regarding the 2020 economy,” this month’s Industrial Heating Equipment Association’s (IHEA) Executive Economic Summary begins. “The unemployment rate is still very low and there have been several months of solid job growth. The expected growth rate for the year remains close to 2.0%.”
The five index readings that are moving in a positive direction include new automobile/light truck sales, new home starts, 
industrial capacity utilization, metal pricing, credit movement as measured by the Credit Managers’ Index and the Transportation Activity Index. The report continues, “The latter two readings have a history of being ‘canaries in the coal mine’ as they react quickly to changes in economic momentum and tend to point the way for the rest of the economy later.” However, the power of the consumer is key to growth as the summary states, “The common factor, as far as growth, is anticipation of a decent short-term trend and the existence of confidence within the ranks of the consumer.”
The report also conveys that with the good news, there is some concern for what to expect later in 2020. The six indices that have trended in a more negative direction include steel consumption, the new orders index from the Purchasing Managers’ Index, industrial capacity utilization, capital expenditures, durable goods and factory goods. The summary reports, “The negative activity is almost entirely focused on production decisions.”
It appears as if Americans are feeling confident as they bring in 2020, “The consumer is still in a good mood and has yet to start worrying about the possibility of layoffs or the arrival of inflation. That translates into wishing to buy cars and homes and these indicators are therefore trending up a little.” However, as the reports concludes, it is an election year and, “Election years always create uncertainty.”
The report 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.
