2014 was predicted to be the best year for the economy since 2005, with a strong rebound by the housing sector and accelerating manufacturing growth. After six months, none have yet to materialize. A pivotal third quarter will be the difference between hope and stagnation.
Manufacturers need a gangbusters second half if 2014 is going to be a year of meaningful growth. The third quarter, now begun, will be pivotal, because the breakout year everyone expected has not materialized so far and the above-3 percent annual growth that’s tied to it hangs in the balance.
Economists remain hopeful of a second-quarter surge after a winter of discontent, but that would merely get us out of a miserable first-quarter hole of negative 2.9 percent GDP. Even a positive 3 percent second quarter is looking like a tall order now; through May, the big indicators like industrial production, factory orders, and exports have sputtered. ISM’s manufacturing PMI had a lukewarm June, as well, nixing any notion of accelerating growth.
One good piece of news is that job growth has been strongest since the start of the millennium. A continued healthy jobs picture should further lift consumer confidence, but unfortunately, even this has yet to trigger consistently higher personal expenditures, which drive 70 percent of GDP. And troubling, too, is a housing sector that still has yet to prove those forecasts of a sharp 2014 rebound that got everyone excited. The bottom line is 2014 is still not clicking into high gear after six months, which begs the question: Will that eagerly awaited surge come soon, or is 2014 dying on the vine?
William Ng, Editor-in-Chief, firstname.lastname@example.org.