Despite the doom and gloom of news reports, there is a silver lining glinting through our stormy economy. The trick, says Dr. Chris Kuehl, economic analyst for the Fabricators & Manufacturers Association, International (FMA), is knowing where to look. In the FMA economic newsletter Fabrinomics, Kuehl reported finding three precious gems amidst the ashes that provide unique opportunities for savvy businessmen. Manufacturers and businessmen who make use of these three unexpected opportunities will position themselves to take maximum advantage of future opportunities as the economy recovers.
- Commodities. Costs are dropping on some of manufacturing’s most used commodities. After posting historic highs, the price of oil has dropped more than $70 in the past three months. While diesel prices unfortunately haven’t dropped at the same pace, the price of gasoline has plummeted to less than half what it was last summer. Steel and copper prices are also sagging. “In fact, most commodities have slipped,” Kuehl notes, “which is good for businesses where these costs are the biggest considerations. Of course, lower input costs don’t help much if demand for the finished product is off, but it doesn’t hurt to get some cost relief when the recovery begins to surface.”
- Labor. Unemployment has created a highly skilled, diverse and available labor pool. “The unemployment rise puts some talented people on the market,” Kuehl notes, “and that allows smaller companies to have access to people only larger companies were able to recruit in the past.” The strong labor pool provides an excellent opportunity for companies to improve their employee base and strengthen weak areas. Kuehl also notes that in a downturn people are more grateful for their jobs which can result in higher productivity.
- Banking. The mortgage meltdown and resultant credit crunch has taken a heavy toll on America’s banks. The Feds have been forced to shutter a number of small local and regional banks and even the big boys are hurting. Those that survive will be looking for smart ways to re-engage with businesses and consumers. This is the time to strengthen your relationship with your banker. The economy will recover in time and an effective banking partner will allow you to update and expand to take advantage of future opportunities.