The grass is greener
While some would say the U.S. economy is due for a recession this year, Charlie Hall says the economic indicators point in a different direction. The Texas A&M University Ellison Chair holder and economist says, “There's nothing holding us back from having a great 2015. We're going into this spring season better off than we have or have been.”
In his Economic Outlook for the Green Industry in 2015 presentation, Hall notes low gas prices, a rise in the housing market and an increase in personal consumption as good signs. “We're not knocking any homeruns out of the ballpark, but we're consistently getting singles and doubles, so that's roughly good news,” he says.
Even though last year started out with a negative GDP, 2014 averaged out to be the best year since recovery from the Great Recession began.
And while there is still a 1.9 percent gap between the U.S. potential and the actual GDP, it's shrinking. That's based in large part on the personal spending of consumers. In the fourth quarter, those expenditures were 65 percent of the GDP.
Gross private domestic investment, such as new inventory or equipment, has been on an upswing since the recovery began, which is a good sign of growing business prospects.
When it comes to income, more and more people are joining or rejoining the workforce regardless of how long they've been out of work, dropping the unemployment rate to 5.7 percent. However, Hall warns, a lot of people who quit looking for work are going to re-enter the workforce now that conditions are improving, which will skew the unemployment numbers.
With more employed Americans and a drop in gasoline prices, consumer confidence is definitely on the rise. “Gas prices make people feel better or worse, depending how high or low they are,” Hall says. And with the Energy Information Administration predicting an average gas price of $2.33 in 2015, “we're sitting pretty good in terms of confidence,” Hall says.
In fact, Americans are spending more today than they did prior to the recession. And beyond the increased consumer confidence, which means more spending, low gas prices should be huge savings for contractors in terms of fuel and supply costs.