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THE 2020 ECONOMIC OUTLOOK

Brian Beaulieu, CEO of ITR Economics, lays out the facts to help eyecare professionals understand what 2020—and beyond—holds for their business

SLOWDOWN TODAY, BUT SIGNS EMERGING FOR NEXT RISE?

ABOUT BRIAN BEAULIEU
An economist with ITR Economics since 1982 and its CEO since 1987, Beaulieu is also chief economist for TEC, a global organization comprising more than 13,000 CEOs. Previously, he was an economist for the U.S. Department of Labor.

Plan on slugging it out in the near term followed by better times beginning in the second half of 2020.

The U.S. economy and the global economy are slowing down. Outright contraction was evident with some of the recent data, but we think deceleration or flatlining is a more apt description of what to expect for the vision industry through the first one to two quarters of 2020.

None of this is news to The Vision Council—it is in line with ITR Econo-mics’ forecast. Successful businesses may have already made their plan for protecting or increasing profits based on that forecast.

Now it is time for you to think a half business cycle ahead and plan your actions for the next change. The next shift in the business cycle will be one of accelerating rise.

Recovery in the second half of 2020 will quickly give way to a U.S. (and global) economy gaining ground on the upside of the business cycle. We are scouring the leading indicators in anticipation of seeing empirical data to support our upside forecast for 2020 and 2021. We have three leading indicators giving us reasonably solid positive signals for the next ascent.

We need two more before our confidence level goes into normal territory, which would mean you should plan and act accordingly for your business.

Once we have the five positive leading indicators, we will have a very good idea of when the growth rate for retail sales will accelerate. This is going to be crucial for the eyecare industry.

We need to experience business cycle conditions improving to the point where consumers move forward with discretionary purchases or are inclined to go more upscale with their purchases. The fact that wages are going up will help our cause.

However, the potential for tariffs to sap some strength from the consumer is still with us. Tariffs are going to become increasingly unhelpful in terms of how much acceleration we will experience on the upside of the cycle in general, even though there will, of course, be some who win while others lose.

A frequent question these days is how the 2020 elections might impact our forecast. As is our usual, we don’t spend much time worrying about political imponderables because the political scene is reactive, not proactive, vis-a-vis the economy, and the political impact is almost always overstated (as was the case with the 2018 tax cuts).

However, when push comes to shove, we can see more negatives than positives being put upon the economy as a result of the election in November of next year. We have plenty of time to worry about that because, by then, the die will be cast for at least the first two to three quarters of 2021.