Global Growth Is Key in 2015
Eli Lustgarten, President, ESL Consulting, sat down to talk economics with Pat McGibbon, VP - Strategic Analytics, AMT - The Association For Manufacturing Technology, at The MFG Meeting 2015.
When asked if demand was easing, Lustgarten said “it’s complicated.” There is a deflationary cycle right now for every commodity and global growth is very slow. With tight financial policies around the world, every major country has some type of quantitative easing.
The key is to jumpstart global growth. Two opportunities to do so are in Europe, which has 1.3% growth and forecasts are 1.5%, and China showing 6-7% growth. Lustgarten said stabilizing China will be crucial because they are Europe’s largest exporter.
Although the dollar is strong, Lustgarten said, “The U.S. growth rate is not terrific, but it’s a little bit better than anywhere else in the world. But it can’t stay that way. We can’t grow and let the rest of the world languish.”
When the conversation turned to oil, global growth also has an effect on prices. “We’ve had a massive collapse in commodity prices in virtually every commodity you can think of and now it’s being exasperated by the drop in oil prices,” he said. Businesses understand that costs are down, but if global economics growth doesn’t improve, that pressure will continue to intensify.
Lustgarten finished his speech at The MFG Meeting by saying it’s still a great time to be in manufacturing. There is a strong forecast for capital equipment, especially manufacturing technology orders. Overall, he said, the manufacturing technology industry is greatly affected by global growth and there must be financial policies in place to stimulate world economies.