Recent ITR forecasts lead us to believe that the economic state of 2014 will prove weaker than 2013, in preparation for accelerated growth in 2015. In response to the shifting momentum, Senior Economic Advisor, Alan N. Beaulieu, emphasizes that October 2013 through June 2014 will be growth quarters that must be capitalized on before the slight—and hopefully short-lived—downturn.
Key Industries Impacted by 2014 Downturn
Economic factors, such as the steady decrease in the Housing Affordability Index, coupled with increases in the Consumer Price Index (CPI), equate to deteriorating disposable income. This ultimately yields a consumer-led slowdown, most notably in retail sales. Industry retail sales that will likely be affected by the tightening in spending are as follows:
- Furniture & Home Furnishings
- Lumber & Construction Materials
- Metals & Minerals
- Electrical & Electronic Goods
- Machinery, Equipment & Supplies
Beaulieu’s Advice for Wholesaler-Distributors
Based off of this assumption, Beaulieu advises wholesaler-distributors to begin preparation for the deterioration in retail sales in the second half of 2014. This can be accomplished by leaning out inferior product inventory and improving efficiencies in the distribution network. In addition, it is important to aggressively pursue new markets and opportunities, as the outlook for mild recovery in Europe is expected to be short-lived when considering unstable US economy expectations in 2014.
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