Economic and Inflation Outlook from Merrill Lynch › › › › › › › › › › › › › › › › › › ›

Economic and Inflation Outlook from Merrill Lynch Wealth Management

By Samantha Darling LaCount, NATM Tracks Editor

The National Association of Trailer Manufacturers (NATM) hosted Andrew Cottrell, a Merrill Lynch Wealth Management advisor, for a webinar in September to provide members with economic insight in these unsure times.

There are eight business cycle indicators Cottrell and Merrill Lynch look at when assessing if the economy is headed toward a recession: inflation, labor market, yield curve, U.S. consumer, business conditions, housing market, credit conditions, and equity market. In December 2007, all eight categories were indicating a recession was on the way. Whereas, July 2022 was more of a mixed bag.

Cottrell's data showed 73% of the economy is driven by consumers. And while consumer savings has increased by $2.5 trillion since the COVID-19 pandemic started, they aren’t spending that money. Consumers are feeling it at the pump. They’re feeling it at the grocery store, and that sentiment is causing consumers to pull back.

Charts from the Fed Bank of St. Louis, Federal Reserve Bank of Cleveland, and Atlanta Fed all showed an expected higher level of inflation for the next several years. This could lead to lending drying up and interest rates continuing to rise.

Supply chain disruptions also have put a strain on consumers as well as businesses. At the start of the pandemic, the country shut down. Once things opened back up, there was a sharp hike in demand across the board. Companies struggled to rush to get production up to meet the need, stalled by continued shutdowns and health protocols changing all over the country. When you turn the economy off like a light, it doesn’t turn back on as fast, the presentation summarized.

After companies fought to kick up production to meet the sky-high demand, it plateaued and cooled off. Even large companies are struggling with the ups and down. Apple reportedly slashed iPhone production after lackluster demand, and Walmart made headlines with photos of surplus inventory pilled high in stockrooms and aisles.

Businesses, like consumers, are flush with cash. Six trillion dollars was printed and pumped into the economy over the pandemic. It’s whether or not companies continue to spend that cash or not that will determine future economic growth, the webinar explained. Businesses too are struggling with bruised consumer confidence. Prices are high and geopolitical uncertainty is slowing global growth.

Inflation and the geopolitical climate are hurting consumer and business confidence alike, but it’s not all dark skies ahead. While the country has seen a technical recession, there are indicators that it won’t reach 2008 depths. Some key economic indicators look drastically different from then to now.

Home purchases are still high - a notable difference from the 2008 housing market crash. Data from the webinar also showed that wages are rising, as opposed to them falling in 2008. And we are continuing to see low unemployment, which is a contrast to the unemployment spike of 2008.

The webinar discussed that the main difference from then to now is generational. One of the largest factors of an economy is the number of 28- to 44-year-olds in a given country.

From 2000 to 2010, 72 million U.S. baby boomers left this age bracket and handed off the economy to the 54 million of Generation X. Now, those 54 million Gen Xers handing off the economy to the country’s largest generation to date: 110 million millennials.

While this population spike is part of the reason for inflation, it is also why the labor and housing markets are so strong. Adults ages 28 to 44 are in their peak economic years. This is the time in most adults’ lives when they hit peak earnings and peak consumption - think childcare costs and home purchases.

Advice given to business owners was to ride this demographic tailwind. The economy has had negative growth as of late, but it is estimated that the overheated economy will right itself over the next 12-24 months.

The webinar discussed how 2020 was an economic anomaly year. Recovery from the pandemic shutdowns led to historically high demand. And while growth has since slowed, it was expressed that the worst of the cycle appears to be behind us. It is expected that the economy will grow with the millennials in the coming decade.

Businesses may feel the country is in a deep recession. Growth far exceeded what was expected for 2020, and now it’s down, and that is challenging. Economic growth is likely to be flat for the next year or two. But the hope is that companies feel some strain because they had such good pandemic recovery years. It was expressed that if companies can keep tight margins and ride out the storm there are more good economic years on the horizon.

To see the schedule of upcoming webinars and other NATM events, visit www.natm.com/events.

To see past webinars, visit NATM’s Resource Library at www.natmshop.com/member-shop. ■

NATM Encourages Members to Participate in Trailer Safety Week 2023

By Savana Morrison, NATM Marketing Director

Trailer Safety Week 2023 will take place June 4-10, 2023. The mission of Trailer Safety Week (TSW) is to improve the safety of the nation’s roadways by increasing trailer safety awareness through education of end-users, dealers, and manufacturers on safe trailering practices. While the National Association of Trailer Manufacturers (NATM) prides itself on promoting trailer safety 365 days a year, TSW offers a unique opportunity for the trailer industry to come together and make the nation’s roadways safer one trailer at a time.

Held the first week of June every year, TSW has reached hundreds of thousands of people. It is the first nationwide traffic safety initiative aimed at addressing safe towing practices for light- and medium-duty trailers. NATM has developed content and resources in furtherance of this mission, all available through www.TrailerSafetyWeek.com.

5 Reasons NATM Members Should Celebrate Trailer Safety Week:

1. Participation shows customers your company’s commitment to safety

2. NATM Members are industry leaders in safe products and practices

3. Provides an opportunity to partner with local government agencies

4. Allows companies to be a part of unifying the trailer industry

5. Creates media placement opportunities for participating companies

Convinced your company should be celebrating Trailer Safety Week? NATM is encouraging its members to participate in this campaign to reach end users and dealers as either Trailer Safety Allies, Champions, or Partners.

Trailer Safety Ally Program:

Becoming an official TSW Ally is a wonderful opportunity for companies who want to be involved in the safety movement but don't have significant time to invest. NATM provides Allies with the official Trailer Safety Communications Kit to promote their involvement in TSW and to share information about safe trailering practices. This digital kit includes precrafted social media posts, downloadable TSW graphics, a blog post, and more. Promoting the company’s involvement with Trailer Safety Week is a breeze with this jam-packed kit. The content can even be customized to include content specific to each Ally’s products and services that promote trailer safety.

Becoming a TSW Ally shows potential customers that your company prides itself on making safe products. Visit www.TrailerSafetyWeek.com for more information.

For the awareness campaign to expand its reach and effectively improve roadway safety, Trailer Safety Week depends on extraordinary supporters who go above and beyond to reach their industry contacts and end users. Further, to continue expanding the educational resources available to end users, NATM is looking to partner with experts and other key stakeholders in towing and traffic safety.

As the Association is committed to expansion, two programs were created for industry organizations that would like to join NATM and its TSW Allies in improving trailer safety: TSW Champions and TSW Partnerships.

Trailer Safety Champion Program:

NATM created the Trailer Safety Week Champion program to highlight companies whose support of TSW exceeds that of a TSW Ally. As such, the company will earn greater promotional opportunities. While TSW includes Allies across the country, TSW Champions are those who fulfill the following requirements and receive the benefits listed on the TSW website here: https://www.trailersafetyweek.com/interest.

Trailer Safety Partner Program:

The next level of involvement is TSW Partnerships. The Trailer Safety Week Partnership program was established to recognize companies, groups, and agencies who support the mission of TSW through content development and resource sharing. Partnerships require a more significant commitment to educational content creation and sharing content and must conform to specific standards and requirements. For more information on what it takes to become a TSW Partner, contact the Trailer Safety Week team at TrailerSafetyWeek@natm.com.

For more information about becoming a Trailer Safety Ally, Champion, or Partner, visit www.TrailerSafetyWeek.com. NATM looks forward to working with its members to improve the safety of the light- and medium-duty trailer industry! ■