CHICAGO — The economy has been on a wild ride over the last couple of years, and it’s put every business through the ringer. But looking forward, companies can expect a bit of a break.
That’s what Dr. Alan Beaulieu, a prominent economist with ITR Economics, preached to the audience at the American Society of Baking’s BakingTECH 2022 event being held in Chicago this week. He told the crowd that although there are adjustments to the pace of business in store (some welcomed and some feared), America is forecasted to remain a power player in the global economy for many years to come.
As the financial health of the nation takes blows from inflation, war abroad and post-pandemic driven uncertainty, anxiety levels are at an all-time high. The impact is already being felt at the gas pump and across grocery aisles as essential good prices are skyrocketing. Although it seems that disaster is written on the wall, Beaulieu said that we still have a bit of time before a recession rears its head.
“The press is going to freak out come 2023, saying bad things are happening and that we are going into a recession, but I want you to know that’s not the case,” he said. “Not until later, around late 2025 and into 2026.”
Although there is still some time before a recession is expected to start, things are predicted to slow as far as retail sales. While this is a bummer for companies that have enjoyed record sales during the pandemic’s peak, this leveling is going to have some benefit: the constant demand that’s putting stress on the supply chain and manufacturers to keep up will slow, allowing many businesses to get a bit of R&R. As long as you know what’s ahead, you can continue business strategically.
“You have to know your demographics. Then you have to ask yourself ‘how do I get these people to work for me?’ And you need to be prepared to not just pay them enough, but to pay them well.” —Alan Beaulieu | economist | ITR Economics
“When I look at all of [the statistics], they just say to me to be careful,” Beaulieu said. “Be optimistic knowing a correction is going to happen.”
This predicted slow is not saying that consumers will stop buying, though. As demand settles to a more sustainable level, there will still be plenty of need for bakery products, which means baking companies need to find people to make them. And they need to be willing to pay up for them, too.
“Labor is where the rubber meets the road,” Beaulieu said. “And millennials are the answer to our problems.”
The millennial generation is a key measurement of how wide your talent pool can be. Do you live in a state with a negative migration rate, especially of younger generations? Beaulieu says that might be a problem because you need to put your business where the people are.
“You have to know your demographics,” he said. “Then you have to ask yourself ‘how do I get these people to work for me?’ And you need to be prepared to not just pay them enough, but to pay them well.”
And as this younger generation enters the workforce, companies need to be prepared to adjust for inflation and pricing pressures both in their salaries and when they are pricing their commodities. One key way to do this is by solidifying your company’s competitive advantage and pricing things accordingly.
Although this is an uncertain era we are living in, Beaulieu closed his presentation on a high note by reminding us that we as a country will figure this all out one way or another, just as we have in the past. Equilibrium is a constant cycle, and the return to normalcy might be a bit painful along the way, but North America will continue to be a key player in the global economic landscape.
“North America is strong, and we will continue to get stronger,” he said. “It will continue to power the world.”
