International Door & Operator Industry

JAN-FEB 2018

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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Page 44 of 142

MANAGEMENT by John Zoller & David Bowen, Zoller Consulting, Inc. GARAGE DOOR ACTIVITY INDEX An interesting paradox confronts people who examine and project economic conditions. It is essentially this: The political volatility and turmoil reflected in headlines and broadcast lead stories is wholly inconsistent with the solid economic fundamentals that are driving growth and generating jobs and investment. Stated a bit differently, if your sense of well-being is driven by front-page news (e.g., North Korean Nukes, Brexit, eroding U.S. prestige abroad), you feel significant anxiety. However, if your primary focus is business information (e.g., unemployment rate down to 4.1%, 3rd quarter GDP up 3.0% to $19.5 trillion), you must be at least mildly optimistic. This is not to suggest that political dysfunction has little economic consequence. Indeed, weak governance and misdirected public policy can threaten monetary stability, and such stability is the underpinning of business innovation and success. What the current paradox suggests is that prevailing economic fundamentals are sufficiently strong to offset the partisan political climate that dominates headlines. In short, business planning is best accomplished by focusing on hard, factual economic data – GDP, personal income, employment, real estate values, consumer spending and the value of construction put-in-place. Yes, politics is endlessly interesting, but at present, business expansion is occurring despite a background of political turbulence. 42 International Door & Operator Industry™ The Economy & Construction Activity in Late 2017 As of late 2017, both the global and U.S. economies continued to perform strongly with all signs indicating continuing growth through 2018 and beyond. This is particularly encouraging since early 2017 was disappointing in terms of economic expansion generally and construction activity specifically. However, after eight years of expansion leveling-off in some sectors is to be expected. For most of 2017, the manufacturing sector was sluggish, but beginning in September at least one measure of production activity surged to a 14-year high. Some of the increase was attributed to supply chain disruptions caused by hurricanes, which extended delivery times and boosted raw material prices. Never-the-less, many observers felt the improvement was evidence of the economy's positive momentum, with factories reporting strong backlogs and manufacturing employment reaching its highest level since 2011. Most importantly, industrial production increased 0.9% month-over-month in October of 2017, which doubled the forecast. Positive momentum and manufacturing expansion were both reflected in the growth of Gross Domestic Product (GDP) by 3.0% during the third quarter of 2017, significantly better than expected considering the hurricanes and fires that devastated parts of the county. Along with GDP growth, unemployment fell to 4.1% in early November, and full-employment is typically thought to be in the range of 4.5 percent. Construction and Economic Conditions Are Better Than Headlines Imply (continued on page 44)

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