Flooring industry leaders should plan for a busier 2017, according Economist Alan Beaulieu who spoke at the seventh North American Association of Floor Covering Distributors and North American Building Material Distribution Association Annual Convention in Chicago on November 3.
“Make sure you are doing everything you need to do—whether it’s inventory, people, marketing, advertising—pour money into your business because you are going to get market share and you are going to grow in 2017,” Beaulieu said.
Beaulieu gave a positive forecast for the next few years, based on the moving averages forecasting model developed by his firm, ITR Economics. Contrasting historic performance of the GDP with individual market segments, ITR uses the model to look forward, giving it 98% accuracy over the years.
Beaulieu said U.S. economic foundations, particularly abundant and low-cost energy supply, continue to make it an attractive place for foreign investors.
Dispelling a number of myths about the U.S. economy, Beaulieu told attendees that the United States is the world’s largest percent of the global GDP (China is number two with 6 percent, Germany third with 3 percent). The U.S. also had record-high manufacturing a few years ago and continues to accelerate. “If anybody tells you we don’t make anything here anymore, it’s just not true,” Beaulieu said.
More than half of Americans have been misled into thinking that China outranks the U.S. economically, but in fact the U.S. is the largest economy in the world—seven times larger than China, Beaulieu said. Individual state economies outrank most countries in the world. To drive that point home, Beaulieu showed a map of the U.S. with all 50 state names replaced by countries whose GDPs match the state. New York State’s GDP is the size of Spain’s. California and Texas GDPs match the size of Brazil and Canada.
The U.S. is also the only developed economy whose population is growing, thanks to both immigration and births.
Government spending is one of the factors that will lead the country into a recession in 2019, according to Beaulieu, but it will look nothing like the recession of 2008-2009. “It will be painful, but not traumatic,” Beaulieu said, referring to it as more of a cash event affecting consumers. “So the more your industry is attached to consumers, the more you’ll feel it.”
He noted that it doesn’t matter who gets elected to the presidency—the recession will come either way. Even if the new president is fiscally conservative, he said, it takes 18 months for any major piece of legislation to impact the economy.
Keynote speaker Ken Gronbach, president of Connecticut-based KGC Direct, a market research company, said diversity is the key to future markets. The baby boomer generation of 78.2 million people, born from 1946 to 1964, changed the direction of the business world in every sector. Generation X arrived with 9 million fewer people than the preceding generation. Gronbach said the slowdown in births shut down maternity wards across the country, the petroleum industry and the popularity of motorcycles and SUVs.
“I wish the president had consulted with me on the Affordable Care Act,” he said. “It can’t work. The math doesn’t work. There simply aren’t enough Gen Xers — people in their prime working years — to support it.”
Gronbach said the future of U.S. markets is diversity, and Generation Y is the reason why: “It will be the end of bigotry. They will intermarry. The population will be darker complected. They are very green. They are so cyber, it is frightening. And they are the future.”
While millions of people in their 20s are still living at home, unlike previous generations, this will change. The United States does not have enough housing units to support the need, he said.
“They are moving from their parents’ houses,” he said. “They are starting families. They will need housing, and they will influence real estate in ways you can’t imagine.”
The annual meeting, which took place November 1-3 at the Hyatt Regency in Chicago, reflected the positive outlook for the building and remodeling industry with 940 professionals attending from floor covering, building material, cabinetry and woodworking distribution. More than 200 companies exhibited at the tabletop event, and 57 of those were first-time exhibitors.
The 2016 Distribution Management University, held in conjunction with the annual meeting, was an interactive workshop where distribution managers learned proven techniques and tools to build relationships and enhance their personal brand.
Attendees were able to take advantage of many new enhancements to the 2016 NAFCD + NBMDA Annual Convention. The new partner pavilion featured seven experts who provided attendees with valuable ideas, insights and best practices in their individual areas of expertise.
Attendees could also participate in complementary 15-minute, one-on-one consultations in the pavilion over two days of the event. The consultations covered the following topics: economic resources and forecasting; marketing strategy and digital content; attracting entry level personnel and managing millennials; transportation and freight management; family business management; human resource management; and social media best practices.
NAFCD and NBMDA developed a matching program for first-time exhibitors. They facilitated connections for new exhibitors with a number of their top distributor targets. This program improved first-time exhibitors’ introduction to the association and event.
Panel discussions were introduced in the 2016 program, offering peers insights at an enriched level with questions lead by the panel moderator as well as an open Q&A. Finally, the event boosted a new level of multimedia featuring video vignettes throughout the convention providing exposure to valuable NAFCD and NBMDA member benefits.
“Enhancements to this year’s event not only improved the attendee experience, education and networking, but it contributed to the overall success of the event,” said Kevin Gammonley, NAFCD and NBMDA executive vp. “We received positive feedback and, as always, are excited to help attendees expand their network and grow their business here are the annual convention.”
The 2017 NAFCD + NBMDA Annual Convention event will take place November 14-16 at The Broadmoor, in Colorado Springs, Colo.