CHICAGO - A robust housing market and healthy economic fundamentals will drive two percent overall growth in wood products manufacturing in 2017. Speaking at the annual building materials and lumber dealers' convention Economist Alan Beaulieu told kitchen cabinet sales will grow 3.7 percent next year.
Beaulieu gave a strongly upbeat 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 percent accuracy over the years.
Beaulieu said U.S. economic underpinnings, particularly its abundant and low cost energy supply, continue to make it the most attractive place for foreign investors. Dispelling a number of common myths about the U.S. economy, Beaulieu reminded attendees that it 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. is also a manufacturing powerhouse, with domestic production at peak historic levels and growing though automation limits the need for employment in this segment. The U.S. is also the only developed economy whose population is growing, a mix of immigration and birthrate, yielding the millenial generation that is growing consumer demand and business innovation.
Demographic trends were a recurring theme among the presenters at the seventh consecutive year the North American Association of Floor Covering Distributors (NAFCD) and North American Building Material Distribution Association (NBMDA). Keynoter Ken Gronbach of KGC Direct used basic demographic population growth profiles to demonstrate the rise and fall of everything from Levi's jeans to caskets.
Both Gronbach and Beaulieu pointed to the ievitable growth in household formation among the younger adults, and intentions of millennials to marry and have chidren, as reliable forces for sustain growth in housing and the furnishings that go with it.
The gathering itself, November 1-3 in Chicago, reflected the strength in building and remodeling, with a record year 940 distribution professionals throughout the leading floor covering, specialty building material, cabinetry and woodworking industries.
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