"‘The time has come,' the Walrus said, ‘to talk of many things: Of shoes-and ships-and sealing wax-of cabbages and kings-And why the sea is boiling hot-And whether pigs have wings.'"
Lewis Carroll, writing "Alice's Adventures in Wonderland," had Walrus pronounce this to the Oysters whom he and the Carpenter were intent on having for supper. Speaking of such topics, which have no answers, would keep the Oysters talking and walking along the beach until they tired and became the main course, which of course, they did. Written in 1865, Carroll's proposal could easily be used to describe today's discussions about the state of the U.S. economy.
Speculation whether the economy is recovering and at what speed is conversation enough to wear out most manufacturers and suppliers. Continued pondering of a subject with no definitive answers leads to exhaustion, and we may soon find our fate to be that of Carroll's Oysters. So, is there an economic recovery?
Yes. The numbers from the economists, the government, anecdotal evidence from suppliers and manufacturers, and even Quality magazine has solid indicators that we have made it through the worst and a recovery is in process.
At a recent meeting of the American Measuring Tools Manufacturers Association Association in Baltimore, Senior Economist William Strauss of the Federal Reserve Bank of Chicago had convincing evidence that we are in the process of recovery. Strauss acknowledges that there have been struggles in unemployment, consumer confidence and inventory levels, but those are outweighed by an overall increase in corporate profits, a recovery in the stock market, an increased standard of living, increased truck sales and gains in housing. Strauss doesn't hide there has been a loss in manufacturing jobs, but this is a trend, the data shows, that started 50 years ago. Productivity has increased, prices have been kept low and new orders have been slowly improving. Strauss admits his research is not industry specific, though he is embarking on that part of his analysis.
However, Quality magazine's research is specific. The 4th Annual Spending Survey, starting on page 30, includes a projected increase in spending during 2004 for measurement, test and inspection equipment, software and services. The $2.8 billion dollar amount represents a projected 10.3% increase from 2003 numbers. To bolster Strauss' and our research, individual conversations with suppliers and manufacturers indicate that spending has started, albeit slowly. You have told us that you are starting new projects, increasing and retooling production and feeling more optimistic about the future. Suppliers tell us they are preparing more bids and quotes, and delivering more tools.
The recovery is a strange one-different from those of the past. Adding jobs to manufacturing, rapidly rising inventories and a robust dollar are not a part of it. Yet, the data and evidence indicate a recovery. So what is the average manufacturer to do in this unfamiliar landscape? Well, if Carroll's Alice provides any clues, the best course of action is to not try and make sense of the nonsensical.
"‘It's no use trying,'" said Alice, "‘one can't believe impossible things.'"
"‘I daresay you haven't had much practice,'" said the Red Queen, "‘When I was your age, I always did it for half-an-hour a day. Why sometimes I believed as many as six impossible things before breakfast.'"
Spend your time pondering unanswerable questions, or be like Alice and get on with more important things.
What do you think about this new type of recovery? Let me know at [email protected].