Tuesday, August 25, 2009

Recession’s Over (If You Still Have Customers or a Job)

Savvy marketers carefully placing their bets. Research confirms C-Suite and business travelers increasingly embrace the Web. Don’t be a ‘shoulda-woulda-coulda.’

Factory output is growing again. That’s right, the smokestacks and assembly lines are humming anew as we registered the first uptick in the monthly National Association of Manufacturers (NAM) Index since December 2007. Experts say manufacturers cut production so sharply during downturn that they depleted inventories and must now ramp up production to meet demand. Any of this sound familiar to you over-reactive media buyers?

Most economists surveyed by The Wall Street Journal earlier this month believe that the recession is over – a milestone we first called in this blog back in April ("Recession Running Out of Steam"). Stocks have been rallying throughout the summer doldrums, and even Fed Chairman Ben Bernanke declared last week that the global economy is starting to emerge from recession. The S&P 500 stock index closed at a 10-month high after last week’s nearly two percent advance.

On average, surveyed economists expect to see a 2.4 percent increase in output in the third quarter, at a seasonally adjusted annual rate. Construction of new single-family homes has started to climb. Auto sales are up and even sales of existing American homes rose a surprising 7.2 percent to their highest level in nearly two years as cheaper prices and the availability of tax credits continued to entice buyers. Cynics will say it’s a bottom-feeding frenzy, with buyers pouncing in distressed and foreclosed homes. But the smart money says this is more than just a housing sector version of the cash-for-clunkers auto program.

Regular followers of this blog know we’ve seeing nothing more than a natural shakeout of home ownership as we revert to the historical mean of 63.5 home ownership among U.S. households. That’s just a tad under two out of three as we saw in the mid 1980s. Home ownership rose to about 70 percent in mid 2005, just before the bubble burst. It’s now about 67.5 percent and experts say it will gradually go back to 63-ish range over next 10 years. That’s a painful regression to the mean, but just like a .400 baseball hitter entering the dog days of August, you can’t fight the long-term law of averages forever. We love you Joe Mauer, but you can’t beat the almighty Oracle of Equilibrium of the long haul.

The labor market remains one of the biggest soft spots for the economy, though the July monthly jobs report had raised hopes that the worst may be over. Here’s another way to look at it. At no point in our nation’s history have more households felt the need to have both spouses working. And how many American households feel they can get by on just one income? Less than half. That’s right, just 47 percent, according to Country Financial’s Job Loss and Financial Security survey of nearly 800 married employees.

The flip side of equilibrium, of course, is that suffering sectors, like employment will eventually return to the historical norm of about 4.5 percent, from today’s 9.5 percent. You can bet your last Obama button we’ll get there before his first term ends and that’s a heck of a lot of jobs created.

If you buy or sell advertising, you better start taking these macro factors into account, or you’ll be caught in a media inventory shortage that could derail even the best laid of marketing plans.

Webcasting, not just a cool medium. It helps the bottom line

If the live conference and events business didn’t have enough on its plate, a new study by the National Business Travel Association found airports and local governments are not only gouging travelers with prices, but sticking it to them in taxes. The NBTA study found travelers not only pay a local sales tax, but they also spend up to 172 percent more in taxes aimed at visitors each day that they stay at a hotel, dine and rent a car.

In addition to the convenience and improved technology of Webinars, Webcasts and audio seminars, the travel industry continues to sock it to business travelers. Taxes targeting travel-related services – especially at the nation’s busiest airports, like Chicago O’Hare (no surprise), can cost a Fortune 500 company, $50 million to $60 million a year, says NBTA research. “In a tough economic environment, many state and local governments have relied on the old habit of targeting travelers to make up revenue shortfalls, said NBTA.

It’s official. The C-Suite is online

The Internet is the most important source of business information for 60 percent of top executives finds a new report from Forbes and Gartner Group.

Researchers found senior executives spend nearly 16 hours on the Web each week and nearly three in five C-Suite execs hit the Web before they go to work. When they get to work, nearly seven out of eight (86%) check e-mail and half (46%) visit Web sites BEFORE they do any other work. Here’s what they’re up to according to the Forbes/Gartner research gurus:

• 73 percent are doing research
• 65 percent are looking for business and financial news
• 52 percent are checking on competitors and industry trends
• 45 percent are seeking information about products and services
• 32 percent are investigating potential new business partnerships.

So when you’re inundated with wimpy pronouncements from the experts like “cautious optimism,” or “eventual gains” or “starting to emerge,” just think back to where we were six to 12 months ago in the depths of “doom and gloom.” We’ve come a heck of a long ways and if you don’t think that’s a turnaround, then you might want to call your physician and you’re your blood pressure checked. Now is the time to pounce on whatever delayed purchase or strategic initiative you’ve been mulling over. It’s going to be a long, long time before you see cheaper, easier, better or funner time to cut yourself a good deal.

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