It’s hard to believe that in a couple of months we will have lived under the COVID cloud for two years. This transitional period in history is one of those breakpoints between what used to be and what now is.
Such breakpoints happen every now and then like war, major recessions, and big social/technology events are just a few examples. This could be a bad time for those who fear change. On the other hand, it’s a time of challenge laced with great opportunities for the rest of us.
What do all of these changes mean for the Green Industry Marketplace and what can we expect in 2022?
The Economic Future Of The Green Industry
Let’s start by understanding how our industry has experienced two consecutive years of booming business, as have several other industries. It’s completely normal for businesses to experience a period of slow growth after a significant boom. Experts predict 2022 isn’t forecasted to keep the same momentum of the boom as business is beginning to level off.
That doesn’t mean we’re in a recession, it just means business is slowing down in comparison to the year we just had. Prepare to hear lots of gloomy talk on the news about “bursting bubbles” and runaway inflation. The reality is there are no bubbles to burst.
The supply shortage-induced inflation we’re seeing now is aggravated by some government actions. The shortage of labor we’re hearing about is because boomers are retiring and there are fewer younger people to replace them.
This coming year is going to be a good economic year, just don’t plan for high growth rates. The growth rate for the Green Industry will be less than 2020 and 2021.
Consider these two important changes:
- The housing boom is slowing down, be ready for a little less demand.
- The commercial market is heating up, just made the upturn from the recession bottom; expect growing demand.
How Inflation Impacts Our Industry
What about inflation? Since the 2008 recession, the government and the federal reserve kept a tight lid on inflation. As a result, we’ve grown accustomed to low inflation rates, and now anything over 2% is considered catastrophically high. Naturally, deep concern is brewing since we’ve seen 5% and 6% rates in the past few months.
As the year progresses, the inflation rate will naturally reduce from its current high because the economy overall is showing signs of slowing down and the supply chain is catching up. Manufacturers across the country overcut during the COVID recession and it’s taken this long for them to rebuild their capacity.
There also exists a snarl in shipping because of the lack of truck drivers. By the way, even though there are hundreds of boats awaiting off or unloading, container throughput is the highest ever.
Another indicator to look at is the bond markets. Analysts at ITR Economics explains that the market is making two statements:
- The current bout of inflation is transient and therefore interest rates should stay low.
- The bond market is not yet concerned about the credit status of the United States.
The Role The Government Plays
A grave danger lurks for a natural inflation rate reduction and that is government spending. If more spending is added and current spending does not curtail, then the inflation we’ll see becomes systematic, not transitory. Systematic inflation takes a few years to work out while transitory inflation takes a few months.
Our current administration is spending well beyond what most people expected. The question arises, will this cause their additional spending programs to be opposed? Truly, only time will tell. There is one truth that cannot be denied, the government can’t spend its way out of an inflation cycle.
Investor opportunity: Analysts are advising stock market investors to watch for a correction in the coming months. It will be short-lived (3 to 5 months), but for savvy investors, you’ll be able to pick up on some deals. Be prepared for a buying opportunity in this upcoming year.
The Reality Of Labor Shortages
We’ll continue to experience labor issues like shortages for many more years to come. By the way, all the supply chain issues you hear about and experience are a direct result of a lack of supply chain labor. The retirement of Boomers began long before COVID however, the pandemic triggered an abundance of remaining boomers to exit the workforce.
Gen Xers and millennials dominate our economy and what they want is different. Part of that difference is their choice of careers and construction is not one of them. Pity, because they are missing out on a golden opportunity to make a lot of money in a never-ending industry like the green industry. Further, gaps of opportunity abound in the construction trades as well.
The effect of the youngest generation, Gen Z, is inconclusive. They need more time to percolate before we know the nature of their career attitudes.
Create Purpose In Your Workplace
You may have heard, “nobody wants to work” often stated. This is not as big of an issue as many accept. Yes, more people choose not to work and live off generous government largess.
Many of them will be returning to the workforce as this largess inevitably must be trimmed back. Many of them also struggle with what they want to do and it seems some younger people are lacking a direction and appear to be taking a long time to figure it out.
A commonality is most young people crave to feel they are part of something meaningful. Need employees? (I know; a dumb question) Then paint a picture that working for you has meaning.
What more meaning can there be in supporting a free market economy, the economic system that has lifted more people out of poverty than all others. The Green Industry is proven to serve human happiness. Now, there’s a story.
Attracting and keeping good people means you must pay a little more, but the key is to have a company people want to work for. That is the culture of your company, spend more time nurturing a positive culture.
Cheers To The Future In 2022
A company with great culture will succeed even without a plan. A company with a great plan will fail without a good culture to enact it. If you have a good culture and a good plan, you are unstoppable!
Have a great time playing the game of business in 2022! Challenges are ahead, but since when were there no challenges to worry about. Opportunity is abundant, be looking for it and take advantage.
