Steel Products
ITR's Beaulieu Predicts Good Times in '20s, Tough Ones in '30s
Written by Brett Linton
August 25, 2022
The economy will remain healthy and prosper in the coming years, contrary to what some sources might tell you. That was the prediction from Dr. Alan Beaulieu of ITR Economics in a keynote speech at the SMU Steel Summit in Atlanta this week.
Beaulieu remains optimistic about domestic and global health throughout this decade, although he continues to warn of a great recession or even a depression in the 2030s.
He opened his segment examining dismal headlines in recent news and noted that truth was more complicated than clickbait. There are too many contradictory statements from various high-profile figures to develop a clear sense of the economy from such headlines. “We avoid all of that by looking at the math. We are economists, and economists have no emotional content. We just talk math and numbers,” Beaulieu said.
He then dove into dozens of economic indicators and provided future direction forecasts for each.
Regarding the current US economy and recession concerns, he emphasized that while the economy did retract in the first two quarters of this year, the decline was very mild. He explained that news outlets focus on an annual rate of change in GDP, but when you look at a quarterly rate there was only an 0.4% decline in the first quarter of 2022 and only a 0.25% decline in Q2. “So technically, yes, you can call that a recession – and you won’t be wrong.” But that technical definition of a recession doesn’t fit the current market. “Are we going into recession? We’re not. Unless the Federal Reserve board creates one.”
He noted that last year was a great time to borrow money. But now is also a good time. He urged Steel Summit attendees to invest in their companies ahead of future potential rates hikes. “Buy now when it’s cheaper.” He also predicted that wages would continue to go up on a labor market that is expected to be tight for years to come.
For those concerned about political control in Washington, Beaulieu said not to worry. That economic forecast does not hinge on which side is in power.
In the Q&A following his presentation, Beaulieu elaborated on his depression forecast for the 2030s. He noted that ITR has held this forecast for some time and that it continues to.
What will follow those hard times? Beaulieu predicts a booming 2040s to follow the depression in the 2030s. And in the meantime, the US can look forward to several years of continued growth, he said.
By Brett Linton, Brett@SteelMarketUpdate.com
Brett Linton
Read more from Brett LintonLatest in Steel Products
CMC to open rebar fabrication facility in Ohio
Longs producer and metal recycler CMC plans to open a new rebar fabrication plant in Akron, Ohio.
US and Mexico take action to curb ‘unfair’ trade
The US and Mexico announced measures on Wednesday to prevent tariff evasion and protect North America’s steel and aluminum industries.
Final thoughts
First off, we hope everyone had a safe and happy July 4th holiday, with fireworks seen and BBQs attended. Many parts of the country are quite toasty at the moment, signaling that, yes, summer has indeed arrived. And looking at our most recent survey results, the summer doldrums have arrived as well.
Active rig counts recover in US, slip in Canada
US drill rig activity moved back up last week after drifting lower for four straight weeks. Meanwhile, Canadian counts slipped for the first time after a seven-week rally, according to the latest data from Baker Hughes.
AISI: US steel shipments up in May from April, off from 2023
Domestic steel shipments increased in May month over month but have fallen on-year.