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Separating Feeling from Fact on the Economy

Jeff Dietrich of the Institute for Trends Research (run by popular distribution event speaker Alan Beaulieu) said today at the Heating, Air Conditioning, & Refrigeration International meeting Houston, TX, that distributors need to separate feeling from fact when making strategic decisions about their companies in the next year.

"It won't always feel easy like it did a few years ago," he said. But distributors should not let that keep them from being proactive and taking market share.

He says that distributors and manufacturers should watch their expectations for "linear growth." In other words, if one quarter is up 3 percent, don't expect the next quarter to be up 6 percent. "It won't be a linear rise," he says. "There will be bumps and bruises."

Dietrich told HARDI members that we have hit the bottom, and that businesses are starting to buy again. He expects that to stay above year-ago levels. And economic indicators that lead the market, such as the Conference Board's Leading Economic Index and the ISM's Purchasing Managers Index, are showing improvements. Don't make strategic decisions based on lagging indicators such as unemployment levels, Dietrich says.

While the economy certainly has weak spots, including nonresidential construction, Dietrich and his firm do not expect a double-dip recession. The recovery will be mild. And the economy still has to overcome systemic issues, including the potential for inflation over the next couple of years.

MDM's annual Economic Forecast will be Dec. 9. Registration opens soon.

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