December 13, 2017

Something Has to Happen

Economist Alan Beaulieu on expectations for NAFTA in 2018

The widely respected economist Dr. Alan Beaulieu, president of the Institute for Trend Research, Manchester, N.H, sees cause for caution in 2018. “With NAFTA, well something has to happen. We should maybe rename it HAFTA. But they have to do something, if only because they’ve been promising for so long.

“I would think it would end up largely toothless though not entirely,” he said. “In the end a protectionist NAFTA would cost us and be quite harmful. Only an idiot would engage in protectionism at this point. The world is doing quite well and will continue that way.”

Yes, the economy will look solid and will slowly grow through the first half of 2018, but after that stay alert. “The first half will be better than the second and the economy will be slowing its rate of growth and turning mildly negative in the first half of 2019,” says Beaulieu. “The businesses that plan for that softness will be well ahead of those that don’t.”

Beaulieu will offer an expanded, provocative and above all useful analysis of the domestic, global and metals economies as keynote speaker at the MSCI Carbon Conference Feb. 20–21 at the Sheraton Grand at Wild Horse Pass in Chandler, Ariz.

“The economy will continue to expand in January, more people will be working, interest rates will be up, and there will be a lot of optimism,” Beaulieu said in a pre-conference interview. “But later in the year, companies want to be carefully watching their capital spending so they are not strapped when cash flow eases.”

On a brighter note, Beaulieu sees some resilience and advantages in the existing business model of the more creative service centers, especially those that are watching for new ways to add value to their processing and distribution. “Those functions would be expensive for many end users,” he said. “But some mills might eat into those services. Still, it is the service centers that know their customers best. They have the contacts and the boots on the ground. Know your customer is always the most important thing. And I would bet with any company that does that well.”  

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