With the current rash of economic numbers this week including a weak but better than expected GDP number this morning, it easy to lose sight of a couple of realities.
People will continue to marry, kids will graduate from schools and retirees will move to beaches and warm weather climates. The excess inventory in housing will be absorbed at some price and prices will begin to stabilize. Granted, this will not be evenly distributed geographically (i.e. Detroit) nor will it happen as quickly as many would like, but it will happen and it is not unrealistic to think that it will happen by the end of the year.
Consumer spending is slow and retailers are dumping inventories. At some point this year, production will need to increase to insure that products are available for even reduced sales levels.
New lows are indeed ahead and the financial news will not be pretty for the next couple of months. But everything you see or read in the news right now is historical and not forward looking information. It is not unrealistic to see a very weak early 2009 and a growing late half of the year.
The stimulus bill, despite the huge amounts of pork, will make a difference. There is also way too much money being pumped into the system for us to not see some growth this year.
Check out this chart from the St. Louis Fed that illustrates just how much money is being pumped into the system.
It is mind boggling to think about how much money is being pumped into the system. With the system primed, growth will return later this year and yes we will be seeing numerous stories on inflation and the impact on Social Security in 2010 and 2011.
So what does this mean to your average marketer? Start getting your new products ready for a late 2009 year launch. Make sure you are prepared to lead your category and that you know your customers. Technology and innovation will be the initial leaders. The marketers and companies who are looking ahead, who are preparing and have a pipeline of new and innovative products will be rewarded. The rest will be playing catch up.
So, turn off CNBC and start talking to your customers and learn what customer need you can satisfy. It will be more rewarding in the end.