Skip to main content

ABC 2013: Economist sees mixed bag in the year ahead

WASHINGTON — The keynote speaker at the welcome luncheon for the American Boating Congress on Wednesday gave the industry conference good news and some not-so-good news about the economy.

"I see both strengths and challenges to the economy in the coming year," Chad Moutray, chief economist for the National Association of Manufacturers, told the capacity crowd.

Moutray began by outlining the strengths he sees, including housing, consumer spending, energy and low interest rates.

"Who would have thought housing would be a strength?" Moutray said, noting that new housing starts are up 30 percent year over year. "That’s pretty impressive, given where we were."

He said the housing market is critical to the recovery. "We really need to get housing up and running if we are to grow the macro economy," Moutray said.

Although he said consumers have been "extremely anxious" about problems such as the so-called "fiscal cliff" combination of federal spending cuts and tax increases, consumer spending was up 3.1 percent in the first quarter.

"The consumer still goes out and continues to make purchases," Moutray said.

A third pocket of strength is energy — declining prices and the increasing benefits that shale oil exploration will have on energy prices and the manufacturing sector, Moutray said. He noted a recent study that estimated lower energy costs could create "as many as 1 million additional manufacturing jobs" by 2025.

His "conservative forecast" for year-end crude oil prices has them close to the $95- to $100-a-barrel levels where they are today.

Persistently low interest rates are an obvious strength, Moutray said, comparing the typical 3.5 percent interest rate for a 30-year mortgage today with rates in 2000, which were in the 7 to 8 percent range. Lower interest rates are helping to prop up housing, consumer spending and the stock market, he said.

Among the challenges, Moutray listed exports, which he considered a strength just a few months ago. Exports have slowed, he said, because of the slump in Europe and slowing growth in China and Canada. New orders have slowed domestically and abroad. The slowdown, coupled with higher taxes, will continue to be a drag on the U.S. economy this year, he said.

Moutray said the manufacturing sector has added 500,000 jobs since the end of the recession, but hiring has "come to a screeching halt."

In terms of business confidence, Moutray said there's a split, depending on the size of the company. Larger manufacturers tend to be more positive and are spending more than small (less than 50 employees) and medium-size (50 to 499 workers) businesses.

"The long-term prognosis for manufacturing continues to be very good," he stressed. "Once we move through the second half of this year — and moving forward — the manufacturing sector is really primed for growth."

Moutray said the nation’s Gross Domestic Product grew 2.5 percent in the first quarter. He's forecasting that it will drop to 1.8 percent in the second quarter, largely because of the sequester, and that it will be between 2.3 percent and 2.4 percent for the year.

Responding to a question about the Affordable Care Act, Moutray said he expects that the impact of the new law on manufacturers and the overall economy will become clear later this year.

As an aside, he said the NAM's chief lobbyist told him, "If you aren't confused by the Affordable Care Act, you aren't reading it."

— Rich Armstrong

Related

1_LCIEARNS

LCI Reports Increased Sales, Profit

The company said net income more than doubled in the first quarter, and sales to marine manufacturers rose 49 percent.

1_MRAAGRANT

MRAA Proposes ‘BOAT Jobs’ Apprenticeships

The association, backed by 26 marine organizations, is seeking a federal grant to fund the workforce development program.

1_NAUTICALVENTURES

Nautical Ventures Receives Dealer Recognitions

The retailer recently was recognized as dealer of the year by Axopar Boats, Flite and NautiBuoy Marine.

1_TRIGG

NMMA Hands Out Leadership Award

Hammond Marine Industry Leadership Award recipient and former Dometic executive Ned Trigg was recognized for his service to the boating industry.

1_MALIBUEARNSusethisone

Malibu Reports Record Sales, Profit

The company said revenue and net income climbed, aided by increased selling prices and an unexpectedly high number of boats delivered.

norm

New Jersey MTA Celebrates 50 years of Advocacy

As the association marks its Golden Anniversary, recalling its successes is a reminder of the important work MTAs do and why you should be a member of one.

1_ABC

American Boating Congress Begins Tomorrow

The recreational boating and fishing advocacy event is being held in-person for the first time since 2019.

1_BRUNSWICK

Brunswick Corp. Appoints Senior VP, CFO

Neha Clark fills Brent Dahl’s position as senior vice president of Enterprise Finance following Dahl’s appointment to chief financial officer of the Boat Group.

1_DIAMONDBACK

Patrick Completes Acquisition of Diamondback

The wakeboard and ski tower manufacturer will continue to operate independently under the Diamondback Marine brand.