J. Timothy Ferry, president of Racine-based InSinkErator, a division of Emerson Electric Co., says his economic outlook for 2014 is positive, with growing momentum in the housing market and a “revival in the U.S. manufacturing base.”
As the world’s leading manufacturer of food waste disposers and instant hot water dispensers, InSinkErator is heavily involved in both the housing market and the advanced manufacturing industry.
Ferry, who was a featured panelist at the Northern Trust Economic Trends Breakfast presented by BizTimes Media on Jan. 17, said the housing market has seen a “big increase” in the past couple of years, but is still well behind its 2006 peak.
“From a housing perspective, we’re looking for 1.1 to 1.2 million (U.S.) housing starts for 2014,” he said. “That’s a big increase from 500,000 to 600,000 (housing starts) in the height of the downturn, but well off the peak of 2 million in household formations.”
He also said that the repair and remodeling market, which didn’t really exist during the height of the recession in 2008 and 2009, had an uptick in 2013.
Ferry said 2013 showed positive trends for the housing industry, and he sees a continuation of those trends for 2014 and 2015, but also said there is concern over what might happen with changes in interest rates and how that might impact the market.
And though, “the momentum is there in terms of the housing starts,” he said, there is still considerable room to grow.
“If you look at it in longer-term demand, we’re going to need 1.5 million housing starts annually over the next 10 years,” he said.
Momentum in the U.S. housing market also has a significant impact on manufacturing, Ferry said.
“Any time you can have a stronger housing market, overall, it’s good for the economy and manufacturing products that go into new houses,” he said.
Manufacturing and advanced manufacturing, he said, have seen favorable trends in recent years that will extend into 2014. Ferry called what’s happening in U.S. manufacturing a “resurgence.”
However, this resurgence also means a higher demand for skilled trades.
“Five to 10 years ago, people decided against manufacturing, but what this resurgence in the U.S. means is that there’s a strong need for these trades,” he said. “People can make a lot of money by getting into those skilled trades…College isn’t for everybody. We need to do better at attracting young people.”
He said InSinkErator has started apprenticeship programs and worked with technical colleges to try to improve on this issue, but “it’s still a big gap.”
