Last month, we invited renowned economist Alan Beaulieu, to speak at the M. Holland 2021 Economic Forecast. A senior analyst, economist and president of ITR economics with a long-running prediction accuracy record of 94%, Beaulieu predicted the 2007-2008 Great Recession. With the same methodology, he has forecast a robust global economy and prosperous new year for the plastics industry.
While exploring the impacts of the 2020 election and the ongoing pandemic, Beaulieu pointed to several data and economic trends indicating positive growth for our business and sectors.
Beaulieu first addressed COVID-19, noting spikes and hot spots both nationally and globally. While this presentation took place before the authorization of the Pfizer and Moderna vaccines, Beaulieu emphasized that his forecast doesn’t rely on the success of any vaccine. He also predicts that the government, particularly at the state and local levels, will be hesitant to shut down the economy at the levels we saw in the spring of 2020.
Beaulieu predicted the federal deficit to reach $3.1 trillion, which is 135.6% of the Gross Domestic Product (GDP) — a record high. However, he believes that this is a problem we can afford to kick further down the road and worry about in the next few years.
Rather than stressing about the growing federal deficit, he instead urged businesses to take advantage of low-interest rates. He also noted that now is the time to pursue acquisition opportunities and invest and innovate in their products. With President-Elect Biden making it clear that climate change will be at the forefront of his administration’s policy decisions, Beaulieu recommends businesses endeavor to keep pace with changes and innovate with sustainability, the environment, and higher efficiency in mind.
According to Beaulieu, the economic outlook for the plastic industry is more promising than other U.S. market sectors. He was confident about the future of U.S. industrial production and predicted it would continue to rise at an even faster rate than we saw after the Great Recession. He also predicted that we’d see a full recovery in U.S. industrial production by late 2022 or early 2023 — the same recovery trajectory he sees for GDP.
As Beaulieu moved into discussing the M. Holland Company’s key markets, he noted that although production of plastic materials and resins may be tentatively low, it is still a sustainable rate. He also explained that the plastics industry has already begun to experience a rising trend that should remain positive through 2022. This upward trend is something we can also expect from M. Holland’s key market sectors. Beaulieu explained that the rates of changes and lead indicators paint a positive picture for markets from wire and cable to medical and flexible packaging. Global industrial production is also showing signs of increasing growth, with some of the M. Holland Company’s key regions in South America and Europe also expecting to increase production.
Overall, M. Holland Company is optimistic as we begin 2021 — for our businesses, industry, and key markets. While 2020 undoubtedly brought its share of economic and business challenges, we feel fortunate to operate within a resilient industry that plays a critical role in overcoming the pandemic. We look forward to continuing to provide the best possible service and products to our customers while also advancing our offerings and growing our businesses in 2021.