There are headlines almost every day talking about the dichotomy going on in the US economy. Manufacturing is backing off from their previously aggressive expansion plans, while consumer spending, while slowing slightly, is still strong.
We are after all, a consumer economy, with 70% of spending originating with them. Consumers are flush with a little more cash, as wages are up at a higher rate than historical averages for the first time in quite some time. We need to look a little deeper though, as to why those wages are up higher than typical. Are employers just feeling that more generous these days? At PlastiCert maybe, but otherwise I do not think so.
Companies are recognizing the tightening of the labor market. The result being HR departments across the country are advocating wages as a means of hanging onto their people, among other remedies. They are also having to pay more to lure people away from their present employers. Industry leaders from coast-to-coast see the writing on the wall. That expenses are rising due to those wage increases, and in general, the numbers of people available to hire are not there to accommodate their expansion plans. Coupled with international relations, tariffs, and resulting sagging European and East Asia Pacific economies, and manufacturers are being more cautious.
On the scale of who is more in tune with economic trends, I side with Manufacturers much more than Consumers. Manufacturers are much more forward looking and predictive. Consumers are much more reactionary and focus on historical information. In other words, when consumers start to tighten their belts and reduce spending, the dam has already burst.
PlastiCert too is watching trends and factoring in possible effects on the economy. That being said, we just placed a purchase order for a new injection molding press, the 5th new piece of equipment in the last few years. We’re cautious, but still recognize that we need to be planning for the future, not ignoring it. Our financial metrics are healthy. The internal economic indicators tell us we can do this and not overly leverage ourselves or damage our liquidity. We set out on a plan to update and revitalize PlastiCert, and we will continue to do so. The primary driver being gaging our relative ability to serve our customers as well as we have in the past.
Economic conditions aside, PlastiCert is up 16% year-over-year, and we have our customers to thank for that. The most we can do is look out for your best interests and assure we will be here when you need us, now and well into the future.