MHI Solutions - Volume 3, Issue 1 - (Page 45)

ECONOMIC MARkET ANAlySIS U.S. Growth to Remain Modestly Positive in 2015, While Growth in Europe and China Face Some Challenges * By JASON SCHENkER, PRESTIGE ECONOMICS, llC looking back to look ahead ince 2010, the global economy has been experiencing modest growth, and we expect the same in 2015. In fact, we encourage firms to consider that 2015 could look remarkably similar to 2014. Along those lines, a number of critical market dynamics are likely to seem extremely familiar, including modest U.S. growth and the gradual removal of accommodative Fed monetary policy, choppy growth in Europe and China, modestly higher commodity prices, and volatile foreign exchange markets. Geopolitical risks are also unlikely to fade from the fray. While the risks to global growth in the first half of 2015 are elevated, we still expect improvements later in the year. 2015 should be another year of cautious expansion for S most corporations, although interest rates, labor costs, and material costs could rise. of supply chain and procurement professionals in coming quarters is not to be underestimated. labor market and inflation considerations We continue to expect a gradual drop in the U.S. unemployment rate on trend in 2015, although there remains noteworthy slack in the U.S. labor market, stemming from low levels of labor force participation. As the labor market tightens in coming quarters, inflationary pressures could rise, putting pressure on the Fed to hike rates at a quicker pace in coming quarters. Two key areas that could see critical wage inflation are educated segments of the labor force and skilled trades. Additionally, for manufacturers of all stripes, the potential shortage Central bank policy expectations The Fed will continue to watch inflation closely in coming quarters, especially as the labor market tightens further. With a likely gradual future uptick in U.S. inflation, the Federal Reserve will gradually raise the Fed Funds Rates in 2015, with more aggressive Fed Funds Rate targets in 2016 and 2017. At the same time, however, the Fed will remain economic dependent, as Federal Open Market Committee (FOMC) members seek to balance the risks of higher inflation against the risks of higher interest rates. Although an increase in the Fed Funds Rate would make capital at The upside potential for growth in 2016 and 2017 could be significant. This is also true for the global economy. *The MHI Economic Barometer is a quarterly compilation of market and economic data that represents the current general economic conditions for the manufacturing and supply chain industries. * MHI SolutIonS 45

Table of Contents for the Digital Edition of MHI Solutions - Volume 3, Issue 1

CEO Update
Total Supply Chain Visibilty
The Internet of Things
The Promise of the Physical Internet
Big Data’s Impact on Supply Chains
Industry Focus: The Aerospace Industry
Economic Market Analysis
Industry Trends
Fulfillment Update
Safer Handling
Solutions Spotlight
Roadmap Update
MHI News
Promat 2015 MHI Executive Summit and Annual Conference
Index of Advertisers

MHI Solutions - Volume 3, Issue 1