Many people believe that beneath the jitters surrounding the European debt crisis and geopolitical unrest, economic fundamentals are strong and the economy is on a path to a sustainable recovery. But, there are worrying signs that the recovery is fragile and based on temporary government support to consumption and a reflation of some asset markets. Once consumption-oriented stimulus fades, there is a risk that the economy will face a double-dip recession.
Last week, I shared our economic outlook with some folks at the semi-annual conference of the Hardwood, Plywood, and Veneer Association, a trade group that represents the vast majority of the plywood and hardwood industry in North America. Their businesses face long-run challenges of maintaining competitiveness in a country with no coherent industrial policy and short-run challenges of a housing dip and low demand for wood products.
It was a Main Street crowd and they had a better comprehension of the risks to the recovery than many politicians in Washington or analysts on Wall Street. They were painfully aware of problems of high unemployment, state and local government cutbacks, the uncertain tax and regulatory environment, and the risk of a relapse in housing prices.
To view a slideshow that outlines our economic outlook, click here.
— Samuel Sherraden