Is the stock market truly something we want to use as a measuring stick for overall economic health in the U.S.? On Aug. 17 market watchers voiced some pleasure that production in U.S. factories, mines, and utilities increased 0.9 percent, according to the Federal Reserve in Washington. The increase was almost double the median forecast of economists surveyed by Bloomberg News and represented the biggest gain of the year. On Aug. 18 that news was quickly forgotten as the Philadelphia Federal Reserve reported a drop in factory activity for the Mid-Atlantic region—actually the lowest level for the region since March 2009. I guess one region speaks for the entire U.S. manufacturing community.
I'm not feeling the dread that the stock traders are experiencing. I'm actually hopeful.
I spoke to some metal fabricators over the past couple of weeks for a story on the results of our biennial "What Keeps You up at Night?" survey. All were concerned about the economy, but were pleased with the growth their companies were experiencing. They intimated that business would be even better if some certainty could be introduced into economic planning. Of course, that comes when company leaders feel confident about near-term business conditions, and that's not about to happen until the fools in Washington learn to play together.
I'm pretty sure this type of political theater won't last forever. Next year is an election year, and that will spur some sort of action as incumbents look to shore up their legislative resumes.
Meanwhile, fabricators focus on their business. "We try not to concentrate on that [Washington] stuff," Vivek Gupta, president, Texas ProFab, Carrollton, Texas, told me a couple of weeks ago.
When asked how they see their business doing in 2012 as part of our "What Keeps You up at Night?" survey, 53 percent of readers surveyed said "growing" and 37 percent said "staying the same." They are cautiously optimistic about next year. Wall Street should take note.