16 PW DEC2021
ECONOMIC OUTLOOK
PMMI’s Annual Meeting Offers Optimistic Inflation Perspective businesses, particularly those made up of an increasingly younger workforce of Gen Z and Millennials. In his opinion, the U.S. has been fortunate to avoid the double-digit interest rates of the 1970s and 1980s, something Baby Boomers remember. A deep breath is in order. “[Us baby boomers have] been there so many times, and we have survived each one,” he said. “Prices come down on the other side, and it’s just business as usual.” He further pointed out myths around the supply chain and the bottlenecks with container ships at U.S. ports. Because of government stimulus and consumer spending, the supply chain issue is not a result of companies falling behind in the production of goods. Instead, consumers bought more and continue to buy more than they previously did. As the stimulus and unemployment checks dry up, the supply chain will stabilize. “This is a demand problem, not a supply chain problem,” he explained. “As demand eases, you see the supply chain delivering more, then all of a sudden, the situation works its way out, and prices will reflect that [with lowering inflation].” For now, packaging and processing companies need to take advantage of what he still feels are low-interest rates by investing in innovation and processes that drive efficiency. Internally, determine ways to combat supply chain issues by reshoring and embracing The Purchasing Managers Index (PMI, in green) model, a leading indicator of packaging automation to handle the workforce issues. supplies like paperboard, expects prices to fall back to earth. What he implores all companies not to do is spend cash on hand. Therefore, borrow right up until the interest Cerf welcomed 36 new PMMI members, bringing the total PMMI rates begin to climb. Membership to 961. He announced that he, along with the current “Acquire as much as you can until your banker worries about you,” Executive Committee (Mark Anderson, Pro Mach, Inc.; Patty Anderson, he said. “Save your cash for when interest rates are higher.” Delkor Systems; Inc., Jim Pittas, PMMI), was re-elected to another Workforce issues will not let up based on his data for the simple term. Timothy Hudson, Honeywell Intelligrated; Matt Jones, Dorner; reason that the biggest issue is an aging population. The best defense and Bruce Larson, BW Packaging Systems; were reappointed to the for packaging and processing companies, in addition to increasing Board of Directors. Kevin Mauger, NCC Automated Systems; Kevin automation, training, and apprenticeships: higher than traditional Roach, Harpak-Ulma Packaging; and Tom Sioui, Slideways; were salary starting points for younger employees. announced as new board members. “The first thing that you want to do when you want to hire a One of the highlights of every PMMI Annual Meeting is the Millennial is to make sure that you pay them well. Not just enough, economic forecast provided by ITR Economics. As he did before but well,” Beaulieu explained, adding ITR has incorporated higher COVID shut down much of the globe, Alan Beaulieu, president of ITR salaries into its own hiring practice. “You want to pay them well Economics, remained highly optimistic about the U.S.’s near and longbecause they’re quickly going to jump ship for something else if not.” term economic future, particularly as it pertains to packaging. He noted that not paying well to start creates a two-fold problem. “Manufacturing in this nation is strong. It’s vibrant,” said Beaulieu. The company still faces a workforce issue and needs to spend “We are going to see manufacturing continue to grow and forecast additional capital on starting all over with training and onboarding a record levels of output in this country in about a year.” new employee. —Sean Riley He also gets that current inflation in the U.S. is jarring to The PMMI Annual Meeting returned in-person in a big way after 2020’s event was forced to go completely virtual due to the pandemic, with Detroit hosting over 300 members from 146 member companies, including nearly 90 first-timers. The three-day event included business sessions on navigating a COVID-influenced world, breakout sessions on workforce, cybersecurity, and digital marketing strategy, a tour of the world-renowned Ford River Rouge Plant, and networking opportunities to reconnect business and create new partnerships. Chairperson Emmanuel Cerf, Vice President, Polypack Inc., kicked off the business portion of the program with a Chairman’s Update.
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