Global Economy, Competitiveness, Government Policy
It’s a fitting time of year for miracles, and the Tax Cuts and Jobs Act, passed by Congress today fits that description. Granted, the first major tax overhaul in more than three decades is not a panacea. It’s come under an increasing amount of criticism from many factions.
A combination of dynamic and powerful forces including cyber risk, ever-accelerating technological advances, regulatory complexity, natural and human-made catastrophes, and globalization of the supply chain confronts manufacturers more than at any other point in history. To respond to this continually evolving array of risks, executives need robust tools and fresh insights to support their understanding of the risk landscape, as well as to accurately assess the sophistication, effectiveness, and maturity of their risk management programs.
See the most popular content from 2017; the impact of hurricanes on the economy, infrastructure investment, encouraging diversity and inclusion in the workforce, the impacts of the GDPR, and the new language of digital.
Definitions matter and they aren’t universal. In the digital landscape, we are each an interpreter navigating a brave new world. What is a digital strategy? Are we digitizing or digitalizing our business? Do those words mean the same thing or are they different? And what about digital transformation? Is this term a new business buzzword or a profound transformation on the horizon that requires significant preparation?
No one should be concerned that the Purchasing Managers’ Index (PMI) pulled back from an unrealistic 60.8% in September to a still strong 58.7% in October. The September reading from the Institute for Supply Management (ISM) has to be treated as an outlier and interpreted against the inevitable data distortions created by two devastating hurricanes. Hurricane Harvey, in particular, ravaged a manufacturing epicenter at a time when energy-related output is growing as a share of U.S. industrial output. ISM survey respondents in October noted weak business conditions and raw material shortages due to the hurricanes. The aftermath of these terrible storms is going to linger in the manufacturing picture for a while.
As the flood waters recede and the long rebuilding process begins, it is important to assess the impact on the U.S. economy and the U.S. manufacturing sector. Policymakers need to minimize the downstream negative impacts from an already destructive event. Manufacturing executives need to readjust their business plans to account for a significant disruption.
Employment remains a star in an otherwise lackluster economic expansion. U.S. employer payrolls swelled by a strong 209,000 in July, and the unemployment rate fell a tick to 4.3 percent, remaining at a 16-year low. Even with the sluggish GDP growth of recent quarters, it is clear that the U.S. economy is growing above its long-term, non-inflationary potential, creating a strong demand for labor even after eight years of economic recovery and expansion.