Economy's rebound means more spending Even though consumer confidence fell in August, having risen every month since April, the New York-based Conference Board reported that the U.S. and global economies are expected to strongly expand into next year. The Board cites the strong industrial growth that has occurred in the United States and globally. Since mid-2003, the Board reports there has been a rapid acceleration in economic growth rates that have put a tremendous strain on the global supply chain for certain commodities including energy, steel and aluminum -- all major components of the greenhouse industry. Lynn Franco, director of the Conference Board's Consumer Research Center, said the biggest factor affecting consumer confidence is the slowdown in job growth. She said until the job market and pace of hiring begins to increase, consumers will continue to be cautious. More consumers in August said business conditions have worsened and jobs are less plentiful. Consequently, consumers lowered their expectations for the next six months with more expecting conditions to worsen with fewer jobs becoming available. Light at the end of the tunnel While consumer confidence in the job market declined in August, some economists said they see the light at the end of the tunnel in regards to hiring. A September survey of company CEOs by the Business Roundtable found that 40 percent planned to hire in the next six months. That's up from 33 percent in March. Hank McKinnell, chairman of the Business Roundtable and chairman and CEO of Pfizer Inc., said "American CEOs believe the U.S. economy is fundamentally healthy, and see capital spending, sales and employment continuing to grow steadily over the next six months." Eighty-nine percent of the 118 executives who responded to the survey indicated their company's sales would increase over the next six months. "Despite the economy's recent slowdown, CEOs are optimistic about business conditions," McKinnell said. "While the economy has not yet reached its full potential, the fundamentals are still solid." The economy will certainly be an issue on the mind of voters during this month's presidential elections. Another sign that the economy is finally starting to turn the corner is the number of companies that have indicated they are ready to upgrade and expand their facilities. Capital expenditures for companies in the Standard & Poor's 500 are expected to increase 5.5 percent this year, which reverses two consecutive years of declines. Capital expenditures for the first quarter of 2004 were up 5.4 percent for the same period a year ago. The increase during the second quarter of 2004 was even higher, up 5.7 percent from the same period in 2003. Historically, 32 percent of capital expenditures are made during the first six months of the year, 29 percent during the third quarter and 39 percent during the fourth quarter. Even with the expected spending increase for 2004, S&P market analyst Howard Silverblatt said this year's spending is still 3.9 percent below 2002 and 18.5 percent lower than 2001 levels. One of the benefits of a recovering economy will be increased spending by consumers on leisure activities, which includes gardening and other floral-related products. Consulting company PricewaterhouseCoopers reports that domestic entertainment spending will rise an average of 5.4 percent a year to $680 billion between 2004-2008. Wayne Jackson of PricewaterhouseCoopers told USA Today that "consumers who account for about 74 percent of all entertainment industry revenue feel better about spending money." He cautioned that "although the global outlook is stronger than in the previous few years, budgetary pressures such as rising energy costs and increased defense and domestic security will limit the resources available to the entertainment and media industry." As consumers look to spend more on leisure activities, one of the critical questions we need to ask is whether as an industry we are doing enough to make people aware of the products we offer that can satisfy their physical and emotional needs. The presidential candidates are trying to do very much the same thing. Putting all politics aside, promoting our industry has nothing to do with whether you're an "economic girlie man" or not. Send this article to a friend Enter your e-mail address: Enter your friend's e-mail address: Click the image below to send: © 2004 Branch-Smith Publishing