The current economic growth cycle will continue for another six months, but this "crest" will pass in the second half of 2018, leading to a slight economic downturn in 2019, according to Alex Chausovsky, senior analyst at ITR Economics, who presented his semi-annual economic forecast to the Measurement, Control and Automation Association in late November, and reviewed the macroeconomic landscape, including key vertical markets served by MCAA members and their products.
"The next six months represent your best opportunity to take on risk and be aggressive. By this time next year, the tailwinds will become headwinds. The economy will transition to the back side of the business cycle," says Chausovsky. "We've been in an expansion mode for nearly a decade. Despite a small dip in 2016, we're continuing expansion, and should until we hit a small dip in 2019. It will in no way compare to the recession of 2008-09."
Chausovsky adds that overall industrial production was down in 2016, but this wasn't caused by manufacturing, which didn't decline last year. He explained that, though manufacturing makes up 73% of the Industrial Production Index, it was actually the index's other two components, mining (16%) and utilities (10%), which put the downward pressure on the index.