What did I hear at IEOC? Part 2

Even though I have only heard him present a few times, Mark Killion of Oxford Economics has become one of my favorite speakers.


Here are some of my notes from his presentation.  For the U.S. Economic forecast, "expansion will continue."  In fact, it is showing signs of positive GDP forecast through 2022 with no recession in 2020.  However, debt as a percentage of GDP continues to grow which is a concern.

What we are experiencing now is the longest economic expansion in history but there are some warning signs for a recession.  The projection given by Mark was a 15% chance of recession in 2019 and a 40% chance in 2020.

There are three key factors in the cause of a recession and they include government policy, confidence by consumers and buyers at all levels, and behavior as a reaction to the current conditions and anticipated future conditions.

Business confidence is still high but has fallen back but recovered in the past few months.  Capex is exceeding GDP.  Spending on machinery is slower but still positive and inflation started to rise last year but has fizzled.

Inventory to sales ratio warrants attention and oil and gas are more productive meaning more oil produced per machinery.  Audio and video equipment are by far the fastest growing manufacturing segment.  Housing construction is struggling.  Rising energy production lifts transpiration and the internet pushes electronics.  Automotive has slowed to 0.1 to 1.5% growth.

Thanks Mark for a very interesting and informative presentation at IEOC 2019.

More to come.

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