We have often told our clients that "we have never seen such deep-seated pessimism about the economy and society." As a result, we are not surprised to find stories showing that producers are falling behind, most likely because they remain overly pessimistic about the recovery. A fascinating article (link) in USA Today (published 5/10/2010) says demand for manufactured goods has been so strong that suppliers have been having a difficult time meeting manufacturers' needs because they weren't prepared for the strength of the recovery.
One of the companies interviewed for the article, Vermeer Manufacturing Co. based in Pella, Iowa, makes tractors and industrial machines. Vermeer's customers are having to wait for products because their suppliers weren't ready for the quick economic turnaround and can't meet the demand for parts such as tires and hydraulic pumps. According to the article, "sales are up 20% over 2009, and the firm has hired 32 workers this year. If not for the [parts] shortages, [Vermeer] estimates 20 more employees would have been added."
While Vermeer is just one example, the fact remains that pessimism is so rampant that inventories are too low and many companies are not ready for economic recovery. While some might get pessimistic about this pessimism, the economy will continue its V-shaped bounce. As monetary velocity returns and easy money courses through the economy, the recovery will continue gain strength.
Source: USA Today
|
|
Posted on Tuesday, May 11, 2010 @ 9:48 AM
|