8 October 2009

It's not all doom and gloom

By Nicholas Sheble

“When credit froze, the world froze, and business came to a grinding halt,” said Jeff Dietrich on Wednesday at the Reliant Center.

Dietrich is a senior analyst at the Institute for Trend Research (ITR), and he spoke at ISA EXPO’s MCAA (Measurement Control and Automation Association) breakfast on the economic outlook for automation-related industries.

For three years, Dietrich had forecast a severe and long-lasting recession likely, beginning in late 2008. Unfortunately, he was right. 

“When I last spoke to you here a year ago, the $700 billion stimulus package had just passed, we in the U.S. were still capitalists, and I warned you that the package would not alter the severity of the downturn,” bragged Dietrich, whose predictions were correct.

In fact, his organization, ITR, has a strong record of accomplishment for predicting the ebb and flow of the United States’ economy and the world economy too. The present recession is the deepest since World War II.

“The good news is the leading indicators for 2010 are up, and I can tell you that we are predicting a recovery in 2010. As to 2011, it will look and feel a whole lot better for you and your industry,” Dietrich said.

ITR sees a number of systemic issues behind the recession. The tipping points (areas of concern)  they watch are the national debt, interest rates, unemployment, inflation, credit crunch, stocks, international scope, the elections, housing prices, and the price of oil.

Dietrich and ITR are telling clients they should not make their business decisions or run their companies based on the unemployment figure, which is quite high now.

“That’s a lagging statistic and always is the last number to improve when coming out of a recession. It lags the state of the economy by nine months or so. In fact, when coming out of the last recession, employment began to rise 14 months after the recession ended. Businesses are afraid to hire, that’s all. They want to be sure their business is back on track before taking on new help.”