What good are economists anyway?

Yes, I borrowed that headline from BusinessWeek. But I did so with a reason. The BusinessWeek article I’m referring to focused on how wrong so many economists were recently by saying either a recession wouldn’t happen or, if it did, it would be short and mild. With that in mind, I thought I would point out one economist who called it right—Alan Beaulieu of the Institute for Tr...


Yes, I borrowed that headline from BusinessWeek . But I did so with a reason. The BusinessWeek article I’m referring to focused on how wrong so many economists were recently by saying either a recession wouldn’t happen or, if it did, it would be short and mild. With that in mind, I thought I would point out one economist who called it right—Alan Beaulieu of the Institute for Trend Research.

Speaking at the Control System Integrators Association (CSIA) conference this year, as he has now for the past three years, Beaulieu did not grandstand about his correct call on the timing and severity of the current recession during last year’s conference. Instead, he was more forward looking, as he typically is, explaining what is most likely to happen next.

Following are a few of the insights he provided:

  • Industrial production is at its lowest point in 30 years, but we still have not seen the bottom yet. Though it’s clear that the rate of decline is easing, we’re still six to eight months away from a recovery—and that recovery will be mild. However, 2011 will be a good year, economically speaking.

  • Look for oil prices to edge up later this year due to declining value of the U.S. dollar. In 2011, oil and energy prices will move up more aggressively due to increase in global demand.

  • Current deflationary pressures are coming to an end. Expect to see mild inflation in 2010, with more significant rates of inflation (6%-8%) in 2011, which will cause interest rates to rise.

  • Manufacturing industries that look to do particularly well over the next few years include cement, steel, construction machinery, and medical equipment.

Beaulieu also advised managers to view the opportunities available during this downturn. These opportunities include: grabbing market share from competitors who are faltering, investing in training for employees, renegotiating leases on property holdings, and taking time to understand what makes you a better competitor—“because you cannot afford to be viewed as a commodity,” he said.

He also advised managers against cutting pay across the board in order to save jobs. “Eighty percent of your workers will like it,” Beaulieu said, “but 20% will not. And those 20% are your top performers.” He said these workers will never forgive being told that they are of no more value to the company than the other employees. As a result, they will be more likely to leave as soon as things turn around. Beaulieu suggests assessing your employees through an A, B, C ranking strategy and removing your C players rather than imperiling the relationship with your top 20% through across-the-board pay cuts.

Beaulieu also predicted a depression occurring around 2030. But with such a far off timeline, I’ll wait another 10 years to see if his prediction remains the same before getting too concerned.



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2015 Top Plant: Phoenix Contact, Middletown, Pa.; 2015 Best Practices: Automation, Electrical Safety, Electrical Systems, Pneumatics, Material Handling, Mechanical Systems
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Raising the standard: What's new with NFPA 70E; A global view of manufacturing; Maintenance data; Fit bearings properly
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Migrating industrial networks; Tracking HMI advances; Making the right automation changes
Understanding transfer switch operation; Coordinating protective devices; Analyzing NEC 2014 changes; Cooling data centers
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.