When the sun is shining, make hay, goes the old saying.
The sun is still shining on the North American economy as brightly as it has since the financial crisis of 2008 and 2009. Even the news from the International Monetary Fund in April that it had reduced its growth prediction for the U.S. economy to 3.1 percent from 3.6 percent still leaves the U.S. economy growing at a faster pace than any other advanced economy.
The revitalized fortunes of the U.S. economy haven’t gone unnoticed. Attendees and exhibitors at the Work Truck Show in Indianapolis this March expressed the almost universal observation that their business prospects are on the upswing.
They’re ready to make hay, if they aren’t making it already.
Consumer confidence is crucial to service industries, which is essentially what service truck industries are all about. The name suggests as much. Even manufacturers of the industries’ products — from the trucks to the compressors, welders, and cranes — depend on the demand for service. Nobody is going to buy or hire that equipment unless they have customers who want to put them to work.
One can certainly argue — as the Fram filters pitchman did so eloquently decades ago — that when it comes to maintenance, you can pay now or pay later. Any prudent business person takes that to heart. Still, when money is tight, it’s often too tempting to save a few dollars by stretching out the service cycle. It’s just human nature.
So with the U.S. economy once again growing — at a three percent clip, which is rapid for a 21st century advanced economy — demand for all sorts of products and services is expected to grow across the economy. Businesses once again feel comfortable in making those new equipment purchases that they put off during the years of contraction. They’re getting back on their schedules.
Now, the trends aren’t universal. The worldwide plunge in oil and gas prices of recent months has benefited many businesses, particularly in transportation sectors, by reducing the cost of a major input. For oil and gas producers, though, the picture isn’t so rosy. That’s especially true in Alberta’s oil sands, which have high production costs, but also in formerly booming areas like the Bakken region of North Dakota.
Stir into that mix the technological advances in renewable sources, such as solar and wind, and anticipated breakthroughs in battery storage, and the energy sector can be expected to undergo a sea change in the years and decades ahead. How disruptive that will be to traditional energy sectors remains to be seen. But history has shown that technological innovations overwhelmingly improve productivity, and make products and services more reliable, safer and efficient. Ultimately, society, business and industry as a whole benefit — even if the buggy whip makers don’t.
Unfortunately, when the economy contracts, the tendency is to withdraw and become timid about taking advantage of the innovations. As a species, humans are risk adverse. That was a good strategy for our ancestors who had to survive in a world where predators