A Reflection on 2024 and 2025 Outlook from President Tony Ross

It is fun to try to predict the future, and seemingly impossible.  I try to think of the future in terms of challenges and opportunities. Often the challenges that need to be overcome are the opportunities for a business to stand out.

2024 was a tough year for many manufacturers. However, there is a lot of hope for a big bounce back in 2025. We may be at or near a bottom in manufacturing, but I do not see general economic conditions improving this year. While consumer price inflation rate has been tamed, I do think there is considerable economic challenges that still must be faced. Asset prices remain elevated, and without a crash and recession to reprice assets, there is significant risk of stagnant growth and persistent inflation.  A multitude of inflationary factors persist that stand in the way of the interest rate cuts many are hoping will come to spur more demand.

Made in America?

A deglobalization effort is in full swing. The reality of the high cost of production in the United States is a big hurdle to overcome. This is occurring while the baby boomer generation is leaving the work force, resulting in a significant skills gap. Many companies are trying to bridge the skills gap with process and automation. While those efforts are working in some domains, there is clearly major gaps that need to be filled with true expertise.

To further spur American independence, the new administration has declared that the US government will be imposing significant tariffs. Will this be a net benefit to US manufacturers? It may help us be more competitive domestically but is likely to further diminish our competitiveness globally. Will people be willing to pay what it costs to make something in the United States when they are already feeling cash strapped?

Inflation and Government Spending

Another major contributor to inflation has been the ever-increasing amount of Government spending. The government spending on infrastructure has been a lifeline to the industry as consumer goods demand has plummeted. This looks to continue for the next few years, but it will do little to help the broader economy recover.

As I stare down these considerable challenges, I remind myself that it was never supposed to be easy. This year is certain to be another adventure, and I am here for it.

May you live in interesting times,

Tony Ross

President

Astro Metal Craft