The End Is In Sight, Right?


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The End Is In Sight, Right?
By: Steve Slagle, CAE, PPAI President/CEO
Issue: 2009oct

As industry sales have slumped, businesses have gone into and out of bankruptcy and staff reductions have become more commonplace, we all begin to wonder when we’ll see the uptick. We all speculate, grouse, worry and predict and, for the most part, our industry players attempt to stay optimistic. What else is one to do?

While few of us know just when we’ll see the economy and our industry sales begin to improve, most of us cling to any snippets of good news, working hard to make the next sale, trim expenses a bit more and hang tough. PPAI reported our industry suppliers’ sales dipped nearly 28 percent in the second quarter of 2009, following a 20-percent slide in the first quarter of the year. Not good news.

During this year’s PPAI North American Leadership Conference (NALC) held near Chicago in late August, the attendees received some heartening news from Alan Beaulieu, an economist with the Institute For Trend Research. Alan’s firm claims a 96 percent accuracy rate for predicting economic downturns and upswings since charting several economic indicators during the past 20-plus years. His presentation to the NALC attendees was compelling, startling in fact, as he compared what he believes are the leading economic indicators to our industry’s sales trends for the past two dozen years.

Alan doesn’t predict a swift recovery for our industry or most others, but he is seeing a swing upward as he tracks numerous industries’ sales and the financial markets. Maybe we all just want to believe he’s right, but his track record is pretty spectacular. I doubt anyone attending the conference has ever tracked our industry sales to the kinds of indicators Alan regularly monitors, but the parallels between our industry sales and the indices he presented to the group are quite remarkable.

His full presentation is available online at www.ppai.org/NALC for you to review and draw your own conclusions. Rather than reach conclusions about our economic future based on the evening news and discussions among ourselves, Alan gave us some guidelines on which to base our actions for the next six to 18 months. Some of the strongest and most reliable indicators he suggested we pay close attention to are ones you’ll need to find in your favorite financial medium or online:

1. U.S. Industrial Production (Alan reminded us that the U.S. is still the strongest industrial power in the world. He believes China has a host of issues and challenges to overcome in the coming years.)
2. Corporate Bond Prices
3. Purchasing Managers’ Index
4. U.S. Composite Leading Indicator
5. Stock Price Index (S&P 500) Our industry’s sales have tracked the S&P 500 incredibly closely since 1989.
6. Retail Sales Excluding Automobiles

He also advises that we watch FedEx’s stock price as it has been a leader in predicting economic improvement, and as of late August the company’s stock was moving upward. In his presentation you’ll also find the industries or segments of the economy that show great promise or that have been largely unaffected by the recession. These are all good tips on which our members can focus their sales efforts.

No one has a crystal ball and Alan repeatedly cautioned that the recovery will be slow and painful for many. His overall advice for our companies is to be prepared, anticipate and take positive actions before the recovery is fully underway to stay ahead of the competition and gain momentum.

Oh yeah, one last thing. Alan also is predicting a major economic depression in 2029 based on actions and decisions being taken today that contribute to a huge and growing federal deficit. So, if you’re a believer, we have 20 years to get our business and personal affairs in order.

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