A new year typically has a salutary effect on all but the professional pessimists in this country. 1996 is no different, since a number of economists generally are lacking in optimism for much growth, placing it at about 2 percent. It is more likely to be in the range of 3-4 percent, since economists and presidential advisers are careful not to raise expectations of the body politic too high.
The present conventional wisdom is that the plastics industry can expect average growth of 4-5 percent this year, a pace one analyst in this week's Plastics News said could be sustained for the next 20 years because of greater plastics use in developing nations. The environment exists to support that assessment, as does a cautionary, companion assessment related to price.
Always important, product pricing has become a hugely sensitive issue because the buying power of consumers in the United States has eroded seriously in recent years. A key reason is the effect corporate layoffs have had on consumer buying power.
The elimination of millions of jobs this decade by firms aggressively looking to stay competitive has reduced consumer spending money. Nowhere is that more evident than in the retail sector, as correspondent Michael Lauzon's coverage of the house-wares industry outlook in this issue illustrates. This problem is not cyclical. Corporate downsizing has significantly affected consumer buying power, nearing the point of diminishing returns.
The support of consumers who earn enough to buy the products and services they want is needed for solid economic growth.
U.S. government needs a lesson in business
The partial shutdown of the U.S. government has given the business and labor communities a taste of what a scaled-down bureaucracy might feel like:
The Occupational Safety and Health Administration may lose potency due to lack of resources, for example, or we may see an even more ponderous Environmental Protection Agency.
Not everyone will bemoan those changes - and many won't notice a difference. International commerce certainly has been sidetracked. Some 20,000-30,000 visa applications for prospective visitors to the United States go unprocessed daily, and about 200,000 Americans are awaiting passports that cannot be issued.
That can't continue forever - even if Pat Buchanan is elected president. The economic well-being of Washington and its surrounding suburbs has taken a hit. But, the headquarters locations of the Society of the Plastics Industry Inc. and American Plastics Council notwithstanding, the capital isn't really considered a hotbed of the plastics processing industry.
All kidding aside, the budget impasse has been an embarrassment. Many federal workers have seen their paychecks delayed, and government managers now must deal with employees embittered by the ``nonessential'' tag. It's all further proof that the government could learn a few things from the business community.