One tenant of design that we hold dear at YWS is the concept of responsibly matching project timing with over-all market timing and opportunity. During December and January, as I do pretty much every year, I spent 6 hours in conversations and meetings with various economists (AGC, ITR and RTC) updating myself on the fundamentals driving both the U.S. and global economies.
Here’s some highlights:
First, despite whatever mainstream media outlets might be saying, there are no signs of an economic recession in 2017. In fact, growth in the U.S. economy is expected to be robust….in the range of 3.5%. That’s not bad when you consider the U.S. GDP was US$16.442T (that’s US$16,442,000,000,000 if you like a lot of zeros) or 24.5% of Global GDP in 2015! Even better for the U.S. economy is that this year (and next) will likely be driven by the consumer….which accounts for virtually 66% of the U.S. GDP (twice what the Business and Government sectors are combined).
What’s the catalyst for the consumer driven economy? Consumers have generally fixed their debt problems, they are saving more than they traditionally have and oil futures look pretty flat as well (predictably low fuel prices).
All that is good news for the Leisure Industry!
Not everything can be coming up roses and there’s a Yin to this Yang. We are in the second half of the current economic expansion, where exactly we don’t know since its been a bit abnormal when compared to other economic cycles. Inflation is expected to accelerate from its historical low and prices are going up on construction materials (zinc, steel, tin, lead, aluminum and copper) and labor. The strong U.S. Dollar is impacting foreign imports and U.S. exports and stalling or stalled growth in China, India, South America and Russia may have an impact. Then there’s always the possibility of a Black Swan event.
So what does this mean?
With the U.S. consumer in a position to spend money on leisure activities and the construction industry still recovering from years of gloom there is a golden opportunity to leverage this opportunity by getting leisure-focused projects online now. Get them stabilized, reap the near-term benefits and position them for an eventual slowdown as this cycle ages out.
The sun is shining on the Leisure Experience Economy, now is the time to take advantage (and don’t forget your shades)!