In our last blog, The White Cliffs of Dover, we mused about the number and variety of ‘forecasts’ and ‘prognostications’ published at the time about when the recession would be over and we shared my secret for predicting the future, which involved the CD player in my car and the principle of randomness.

The point we were trying to make was that NO ONE can predict the future; not the people writing those articles, not me, not you, not even Warren Buffett (even though he did declare REITs ‘weapons of mass economic destruction’!)

Don’t get me wrong. Charlie Barnhart & Associates LLC believes in monitoring key economic indicators and the value of strategic research to leverage beneficial industry trends. That’s what we do. But currently there seems to be a general business paralysis. Our industry seems to be holding its breath waiting for some magical sign before resuming operations.

Here’s the real news: The recovery is happening RIGHT NOW and if you’re not participating in it you’re missing the boat!

The indicators are up, maybe not a lot but they are up. Book to bill ratios have stabilized, the ISM index is now over 50 and Innovation has finally come back into favor (about time!) Does this mean that we know exactly what graphical shape the charts will assume in the next six quarters? No! And you know what: it really doesn’t matter.

But, Charlie, you say. My business is down 20% from last year. I need to know when I’ll get back to those joyous days of 2007. My response is maybe next year, maybe five years from now or maybe never. Get over it. As my blessed mother used to say when I fell down and starting crying, “Is the blood gushing out of your body?” (Regular bleeding didn’t count.) “If not, then pick yourself up and get back to work.”

But what about the unemployment rate, you ask. It’s almost at 10%, and climbing, so that means the economy is still in the tank, and everything is still terrible.

Hey, if the unemployment rate is at 10%, that means the employment rate is at 90%. That’s a lot of people with jobs. And that means it’s time to start inventing and making stuff that’s so beneficial and provides such value that we won’t have to lay anyone else off.  In nine words, it is time to quit whining and get busy.

What will the new economy look like? It’s time for a dose of  reality. The new economy is going to look a lot like the old economy except you’re going to need to subtract about six or seven years. Houses are going to be (should be) places where people live and raise a family, rather than being money generating machines. We will (should) save before we purchase, rather than completely replacing all our belongings every six months on credit. We will (should) purchase automobiles for transportation instead of status symbols. We might even start saving money for our children’s education and our own retirement. Maybe Economists will even stop referring to ‘The American Consumer’ as the driving force of global economic development as if it were a holy calling.

 
A big change but you know what, it will actually be ok. We will get used to it, and China or India can become the driving force of global economic development for a while.
 
Does this mean I believe that everything will be easy in the EMS industry, and that we all will live happily ever after? No. This industry is still a sick puppy, with some deep systemic maladies. Fortunately (as always) we have a few ideas about how companies, including both the suppliers and consumers of Electronic Manufacturing Services, can improve their own prognosis as we experience the recovery together. There is much that can be done, and some things that should NOT be done. Stay tuned for the next blog for our ideas.

Keep the faith!