The MHEDA Journal - First Quarter, 2018 - 75

CONVENTION SPEAKER

equipment; are there any other key
business indicators that people in our
industry should be monitoring?
BB: We look at some small business
capital expenditure indicators. They
are currently positive. We're looking
at machinery utilization levels, and
they're running above a year-ago levels, that's another positive indicator
for folks in our space. For material
handling in general, the B-to-B space
is expected to continue to do very
well. Whether that's material handling
through distribution or DC, or material
handling through a production facility,
both sides of that equation look to be
very positive in 2018.
TMJ: In the first quarter issue, we
always do a survey of our members to
get their feeling going into next year.
And it is up across the board, but with
the caveat that they're counting on tax
reform to pass. How much would the
passage or failure to pass this proposed
reform affect your forecast, if at all?
BB: Well, it really depends on what
shape it finally takes. There are two
very different proposals, one from the
Senate and one from the House, and it's
going to have to go through reconciliation. No one knows what it's ultimately
going to do. Here's what I can tell you,
though. Based on our analysis, your
readers should not expect that passing this tax cut for corporate income
taxes is an automatic stimulus for the
economy. It usually does not work out
that way. Invariably, they're going to
try to make this as revenue neutral as
possible, which means that some are
going to win and some are going to
lose. Some corporations may win but
if these tax changes don't help with the
spending side or if it actually adds to the
deficit, we're going to see a drag from
the consumer side or we'll see higher
costs, because interest rates will go up
because they just added to the deficit.
So it's hard to say. But if there's going
to be a positive impact for our readers,
it will likely come in 2019 more than
2018. By the time they get around to

passing this thing and it actually makes
a difference, it will be 2019. And in
terms of a forecast for 2019, if everything goes right and the stars align, we
can probably take away some of the
softness that we have built into 2019.
But here's the caveat with that. We
think B-to-B is going to hold up well
in 2019. Our concern for 2019's GDP
growth rate is in the B-to-C space, not
the B-to-B space. So, it's not like we're
anticipating any difficulties for them in
2019 anyway. It'll be a slower year, a
year where they're going to have to play
with some pricing, but it could make it
an even easier year, I suppose in 2019.
It's too early, though, to know any of
that with confidence. We don't see any
big downside to the economy from it;
we just don't see any big upside, either.
TMJ: What would be the reason for
B-to-B to hold up through 2019 and
B-to-C to be a little bit softer?
BB: Right now it's in the leading indicators. For instance, we're seeing that
the personal savings rate, as a percentage of disposable income, is coming
down. That trend leads retail sales by
about 23 months. Let's call it 2 years
between friends. It's coming down
now, and it has been coming down
for about a year, that means that in
2019 retail sales will be on the backside
of the business cycle. That's a concern
for the B-to-C space. The B-to-B side
we expect will continue to be bolstered

For material handling in
general, the B-to-B space
is expected to continue to
do very well. Whether that's
material handling through
distribution or DC, or
material handling through
a production facility, both
sides of that equation look
to be very positive in 2018.

by such things as the tight labor market, we're still going to be fighting our
way through finding ways to diminish
the need for labor. That's not going to
go away. We think in 2018-19, you're
going to see Amazon and other kinds
of e-commerce continuing to build
out, which always necessitates more
brick and mortars, just not at the retail
level, it will be in the logistics chain
more than anything. It's just going to
stay relatively low unless they really
blow out the budget and if that's the
case, that's another negative we can
take off the table for the B-to-B space
because there's some sensitivity there
for interest rates. And that doesn't look
to be a problem for this business cycle.
The bottom line is that we have two
reliable negative leading indicators for
the B-to-C space telling us to be careful about the 2019 cycle but we don't
really have any negative leading indicator signals regarding actual pain in the
B-to-B space for 2019.
TMJ: You mentioned the labor
crunch, that's something that has been
forefront for our industry for several
years. There's been an increasing shift
toward automation among customers
and our members have had to be dabbling in that arena. Are there any other
strong industries or areas that if members aren't involved in yet, they should
think about getting involved in?
BB: I can't think of another very
broad brush aspect, because the
automation is so huge. And at ITR
Economics, we see this going on for
at least another 10 years. There's no
end to this labor shortage situation. In
fact, immigration policies in the U.S.
are likely to exacerbate the issue, rather
than ameliorate it. So, businesses need
to become ever more creative. For
2019, sometimes it's silly to say these
things because it's not like you can just
pull a lever, but to the extent that you
can direct a sales force or marketing
efforts in a different direction, you're
going to look to some of the areas that
will hold up better than others. And we
The MHEDA Journal | First Quar ter 2 018

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Table of Contents for the Digital Edition of The MHEDA Journal - First Quarter, 2018

Chairman’s Perspective
From the Desk of Liz Richards
Editor’s Note
MEET MHEDA’S 2018 BOARD OF DIRECTORS AND MBOA
MHEDA’S 2018 MATERIAL HANDLING BUSINESS TRENDS
Ask A MHEDA-NET Group
MHEDA Calendar
MHEDA MEMBER PROFILE
@WORK
WOMEN IN INDUSTRY
DISTRIBUTOR FORECAST
SUPPLIER FORECAST
MHI FORECAST
ITA FORECAST
CEMA FORECAST
ITR ECONOMICS FORECAST
2018 MHEDA CONVENTION SCHEDULE
THE RULE OF 72
New Members
Spotlight on Association News
MHEDA Milestones
Index to Advertisers by Product Category
Index of Advertisers by Alphabetical
The Last Word
The MHEDA Journal - First Quarter, 2018 - Intro
The MHEDA Journal - First Quarter, 2018 - cover1
The MHEDA Journal - First Quarter, 2018 - cover2
The MHEDA Journal - First Quarter, 2018 - 3
The MHEDA Journal - First Quarter, 2018 - 4
The MHEDA Journal - First Quarter, 2018 - 5
The MHEDA Journal - First Quarter, 2018 - 6
The MHEDA Journal - First Quarter, 2018 - 7
The MHEDA Journal - First Quarter, 2018 - 8
The MHEDA Journal - First Quarter, 2018 - 9
The MHEDA Journal - First Quarter, 2018 - 10
The MHEDA Journal - First Quarter, 2018 - Chairman’s Perspective
The MHEDA Journal - First Quarter, 2018 - 12
The MHEDA Journal - First Quarter, 2018 - From the Desk of Liz Richards
The MHEDA Journal - First Quarter, 2018 - 14
The MHEDA Journal - First Quarter, 2018 - Editor’s Note
The MHEDA Journal - First Quarter, 2018 - 16
The MHEDA Journal - First Quarter, 2018 - MEET MHEDA’S 2018 BOARD OF DIRECTORS AND MBOA
The MHEDA Journal - First Quarter, 2018 - 18
The MHEDA Journal - First Quarter, 2018 - 19
The MHEDA Journal - First Quarter, 2018 - 20
The MHEDA Journal - First Quarter, 2018 - 21
The MHEDA Journal - First Quarter, 2018 - 22
The MHEDA Journal - First Quarter, 2018 - 23
The MHEDA Journal - First Quarter, 2018 - 24
The MHEDA Journal - First Quarter, 2018 - 25
The MHEDA Journal - First Quarter, 2018 - MHEDA’S 2018 MATERIAL HANDLING BUSINESS TRENDS
The MHEDA Journal - First Quarter, 2018 - 27
The MHEDA Journal - First Quarter, 2018 - 28
The MHEDA Journal - First Quarter, 2018 - Ask A MHEDA-NET Group
The MHEDA Journal - First Quarter, 2018 - 30
The MHEDA Journal - First Quarter, 2018 - 31
The MHEDA Journal - First Quarter, 2018 - 32
The MHEDA Journal - First Quarter, 2018 - 33
The MHEDA Journal - First Quarter, 2018 - MHEDA Calendar
The MHEDA Journal - First Quarter, 2018 - 35
The MHEDA Journal - First Quarter, 2018 - MHEDA MEMBER PROFILE
The MHEDA Journal - First Quarter, 2018 - 37
The MHEDA Journal - First Quarter, 2018 - 38
The MHEDA Journal - First Quarter, 2018 - 39
The MHEDA Journal - First Quarter, 2018 - 40
The MHEDA Journal - First Quarter, 2018 - @WORK
The MHEDA Journal - First Quarter, 2018 - 42
The MHEDA Journal - First Quarter, 2018 - WOMEN IN INDUSTRY
The MHEDA Journal - First Quarter, 2018 - DISTRIBUTOR FORECAST
The MHEDA Journal - First Quarter, 2018 - 45
The MHEDA Journal - First Quarter, 2018 - 46
The MHEDA Journal - First Quarter, 2018 - 47
The MHEDA Journal - First Quarter, 2018 - 48
The MHEDA Journal - First Quarter, 2018 - 49
The MHEDA Journal - First Quarter, 2018 - 50
The MHEDA Journal - First Quarter, 2018 - 51
The MHEDA Journal - First Quarter, 2018 - 52
The MHEDA Journal - First Quarter, 2018 - 53
The MHEDA Journal - First Quarter, 2018 - SUPPLIER FORECAST
The MHEDA Journal - First Quarter, 2018 - 55
The MHEDA Journal - First Quarter, 2018 - 56
The MHEDA Journal - First Quarter, 2018 - 57
The MHEDA Journal - First Quarter, 2018 - 58
The MHEDA Journal - First Quarter, 2018 - 59
The MHEDA Journal - First Quarter, 2018 - 60
The MHEDA Journal - First Quarter, 2018 - 61
The MHEDA Journal - First Quarter, 2018 - 62
The MHEDA Journal - First Quarter, 2018 - 63
The MHEDA Journal - First Quarter, 2018 - 64
The MHEDA Journal - First Quarter, 2018 - MHI FORECAST
The MHEDA Journal - First Quarter, 2018 - 66
The MHEDA Journal - First Quarter, 2018 - 67
The MHEDA Journal - First Quarter, 2018 - ITA FORECAST
The MHEDA Journal - First Quarter, 2018 - 69
The MHEDA Journal - First Quarter, 2018 - 70
The MHEDA Journal - First Quarter, 2018 - 71
The MHEDA Journal - First Quarter, 2018 - 72
The MHEDA Journal - First Quarter, 2018 - CEMA FORECAST
The MHEDA Journal - First Quarter, 2018 - ITR ECONOMICS FORECAST
The MHEDA Journal - First Quarter, 2018 - 75
The MHEDA Journal - First Quarter, 2018 - 76
The MHEDA Journal - First Quarter, 2018 - 77
The MHEDA Journal - First Quarter, 2018 - 2018 MHEDA CONVENTION SCHEDULE
The MHEDA Journal - First Quarter, 2018 - 79
The MHEDA Journal - First Quarter, 2018 - THE RULE OF 72
The MHEDA Journal - First Quarter, 2018 - 81
The MHEDA Journal - First Quarter, 2018 - 82
The MHEDA Journal - First Quarter, 2018 - New Members
The MHEDA Journal - First Quarter, 2018 - Spotlight on Association News
The MHEDA Journal - First Quarter, 2018 - 85
The MHEDA Journal - First Quarter, 2018 - MHEDA Milestones
The MHEDA Journal - First Quarter, 2018 - 87
The MHEDA Journal - First Quarter, 2018 - Index to Advertisers by Product Category
The MHEDA Journal - First Quarter, 2018 - Index of Advertisers by Alphabetical
The MHEDA Journal - First Quarter, 2018 - The Last Word
The MHEDA Journal - First Quarter, 2018 - cover3
The MHEDA Journal - First Quarter, 2018 - cover4
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