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Wishing You Prosperity in the Coming New Year

Even in the face of such a tepid economy recovery, there are reasons to be cautiously optimistic.

“We’re not back to where we were before the recession hit, but we are certainly seeing an upswing,” said Ray Lucas, president of Clovis, Calif.–based Valley Chrome Plating. “It’s not a real dramatic upturn, but it is getting better.”

Lucas’s company, which specializes in trivalent chromium plated truck bumpers and accessories, reduced the employee headcount from 105 to 65 during the downturn. Today’s he’s pleased to report that staffing has since increased by 25%.

Then there’s the case of Tucker, Ga.–based Dixie Industrial Finishing, which also resorted to painful layoffs in 2009. In a recent conversation with Jim Jones, the company’s president, he estimated sales will likely be up by double digits for the year.

These vignettes by no means portray a representative sampling of what the universe of finishers might be experiencing. Still, these cases do indicate, that even in the face of such a tepid economy recovery, there are reasons to be cautiously optimistic.

Some of those reasons are evident in a few of the broader economic indicators. Take, for example, the positive trend seen in the PMI Index—the Institute for Supply Management’s gauge of confidence among purchasing executives. The PMI Index for October—the latest figures available by press time—came in at 56.9%, signalling a continued expansion in manufacturing. What’s more, October’s reading confirms the manufacturing sector actually expanded for the 15th consecutive month, with the overall economy growing—although incrementally—for 18 straight months. Not nearly enough, some would argue, to generate the kind of job growth needed to put a significant dent in a stubbornly high unemployment rate.

Still, signs of progress abound. U.S. industrial production, as measured by the Federal Reserve, appears to have stabilized in 2010, with month-to-month movement mostly on the upside. In October, production of consumer durables rose 0.8%, with the indices for automotive products, appliances, and furniture each climbing 1.1%. Explosive growth, no, but positive traction nonetheless.

And let’s not forget about new car sales, that critical bellwether sector. Industry tracker Autodata said the number of vehicles sold in October grew 14%—compared to the same month last year—on the heels of 28% growth the month prior. On an annualized basis, this translates to 12.3 million units.

Economists generally agree that—in clawing back from a recession—not all industry sectors will recover at the same pace. Former Fed Chairman Alan Greenspan, for one, wholeheartedly believes that the U.S. economy will not see broader gains until the all-important housing market recuperates—an event some experts predict won’t happen until late 2012.

In the interim, finishers are executing cost-saving programs and operational adjustments designed to put their businesses on a firmer footing, with the goal of not only near-term survival but long-term prosperity as well.

Here’s hoping that things continue to go your way in 2011 and beyond.
 

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