Thursday, October 20, 2011

Tidbits From the Beaulieu Brothers

It was Brian this time.  I got to hear from Alan Beaulieu at a Vistage All-City meeting talk about the economy two years ago, coming away with a slue of to do items and armed with a greater knowledge of our economy.  This time his younger brother, Brian (younger by eight minutes) put on the talk for 100+/- CEOs in Central Ohio.  It was another productive day by my standards.

Here's a few of my takeaways from the day:

  • "Left to its own devices, this economy will grow."  Brian didn't have to say much more than that to get my attention.  He predicted 2012 to be a growth year, giving it a "B" grade among growth year grades at one questioners' request.
  • Regrettably, I wish he had stopped there.  Brian also predicted another Recession in mid 2013 through 2014, one much like experienced in the early 1990's.  Since these brothers predicted the most recent recession, its best to heed their predictions.
  • The message:  We have 18 months to prepare for the next one.  18 months.
  • Brian pointed to leading indicators, exports growth, employment increases, and bank lending rises among eight listed signs of recovery.

  • Demographics matter.  Though I never heard Joel Kotkin mentioned in name, the demographic correlations to help predict the future were omnipresent. 
  • Beaulieu's ITR firm considers demographics a "mega trend" with a direct correlation between population growth and GDP growth. 
  • It's why he's bullish on the U.S., India, and Brazil among "winning demographics" and less so on China, Japan, Europe, and Russia for their "negative demographics."

  • A bit about Ohio was charted out for the Ohio CEOs.  Regrettably, our unemployment and other economic trends tend to mirror the nation.  However, construction industry employment is trending up as our building permits.
  • He showed a trend line on the Ohio Housing Price Index showing we've hit the 30-year low and are on the rise, adding "the pain is behind us." 
  • His analysis is that the low in commercial construction activity has happened in Ohio already too.
  • His chart on median home sale prices in the Columbus market didn't show a housing price bubble. "Sane and boring" was Brian's label for our housing market. Yes, he's funny too.
  • Manufacturing news was upbeat.  ITR's trend analysis is showing that near-shoring and re-shoring are real.  Beaulieu suggested everyone in manufacturing "needs to get a great training program going."
  • The leveling of comparative labor costs and devaluing of the dollar are working in favor of export-minded producers in the U.S.

  • Economic development in Licking County got some tidbits too.  Marketing campaigns have a purpose in 2012.  Finally.  It's good we are getting more ready, as a county, to move ahead in this area.
  • News on the defense industry was not as upbeat with the strong warning:  "Wind down or minimize this part of your business."  Here's hoping maintenance and repair in the defense industry is a hedge.
  • The industries that are "largely unaffected" by economic downturns also make for good target industries for Licking County, including energy, "green" industry, and food (including pet food and alcohol).
  • Talking briefly about the Utica shale gas boom, Beaulieu's comments speak to the challenge in Ohio will be keeping the capital here that is earned here from leases and royalties.  His question in answer to a question was a bit of a wake-up call:  "What keeps these people from taking the money and moving to Florida?"  Yikes.
One final conclusion.  With time for a one-on-one question afterward, I asked Beaulieu about the oft-repeated prediction that China will surpass the U.S. in GDP in coming years.  He said, "It's not going to happen" and suggested most economists have backed off of those predictions now.

More good news.

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