By now, every owner and manager of a business in the plastics industry is in full-scale forecast mode for 2020. People are saying there is currently a lot of uncertainty out there and this is affecting their ability to make plans.
I don't know how to measure uncertainty with any accuracy, so I don't know just how much additional pressure, if any, this is putting on overall economic activity at this time. But I will admit we are dealing with an interesting array of unresolved issues.
This year's list of "known unknowns" affecting our national economic future is topped by trade with China, the presidential election/impeachment and Brexit. The plastics industry can add tightening regulations on plastics products to this list. An interesting array, for sure. One thing we do know is 2020 will soon be here, and we need a plan if we want to optimize our opportunities and manage the risks.
In order to make a good forecast, you must start with a firm understanding of the present and the recent past. This will not guarantee your forecast will be right, but most of the things that will affect your business are not random events. Pertinent events most often occur for reasons that can be identified and measured. Therefore, the trends and momentum in the economic and market indicators will always provide useful insight.
Despite all the talk of uncertainty, the overall message I get from the macroeconomic data is one of stability. Things may seem dubious on the surface, but the underlying trends just keep rolling along. To better explain what I mean, this week I will analyze the trends in the U.S. GDP data. I will narrow the focus down to markets and indicators that more directly affect demand for plastics and plastics machinery in my future columns. But we must start by taking a good look at the big picture.