The Economic Stimulus: Boom or Bust?

Many distributors and manufacturers are saying that the stimulus has had limited impact on sales growth.

There are two schools of thought on the economic stimulus package: one side that believes the stimulus package and jobs bill helped drive industrial business while the other group says it has had little to do with the economic rebound.

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In its latest quarterly report issued this week by the National Association for Business Economics, a majority of respondents said the fiscal stimulus has had no impact on the economy.

The recovery is picking up steam as employers boost payrolls, but economists think the government's stimulus package and jobs bill had little to do with the rebound, according to a survey, which was released Monday and published online at

In the latest quarterly survey by the National Association for Business Economics, the index that measures employment showed job growth for the first time in two years – but a majority of respondents felt the fiscal stimulus had no impact

But the economists see conditions improving. More than half of respondents – 57 percent – say industrial demand is rising, while just 6 percent see it declining.

In a recent review of earnings reports from several publicly-traded manufacturing firms in the industrial sector such as Ingersoll-Rand and Actuant, few executives could trace any signs of improvement in their businesses directly to the economic stimulus package.

And in several conversations with distributors during the recent meeting of NAHAD – the Association for Hose & Accessories Distribution – none said they had received a boost in sales from the package. In fact, one hydraulics distributor told me that one of his major projects had been stalled because of it. “The municipality was going to pay for the project. It was water treatment plant work. But they held off on it because they expect to get federal funds to pay instead,” he said.

On the plus side, some manufacturers indicate they may see an increased flow of funds from the package during the last half of the year.

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Jack Keough is a contributing editor to Modern Distribution Management and the owner of Keough Business Communications. He can be reached at or by phone at 508-734-0029. Keough is the former editor of Industrial Distribution Magazine.

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