Mixed December PMI reports are out, and they show a mixed bag of good and bad news. While the overall outlook is not good, there is good cheer as some solid companies have emerged and others that were on the verge of bankruptcy have managed to hang on. In this article, we will take a look at these key positives and negatives and where the blame lies for the poor report.
The report finds that there was an 8.1% fall in new cases of non-payment of medical bills. This may seem like a good thing, but it also means that a large chunk of the population may have been denied essential healthcare. If you are worried about your family’s financial future, then this may be a wakeup call. You may want to take action immediately and reduce the strain on their finances.
On the other hand, the good news is that the biggest sectors which were hit hard by the recession are not the only ones which are showing signs of improvement. Some other sectors which were thought to be recession proof have also found solace in this report. Some other sectors such as construction and hospitality saw some good improvement though other areas were hit hard. So, no matter what sector you consider to be recession proof, there is good news waiting for you. It may just be a case of getting back on your feet and regaining momentum.
However, the worst news is probably the news that has to be given about retail. Falling sales have put a huge dent in the market, with many businesses closing shop or going into short term closure. So, while there are many companies who may still be surviving, the chances of survival are very slim. For the time being, it is probably best to leave the doors of retail shops open, as life will probably not be easy for them to bounce back. They may just need a bit of time to get back to normal, and in the mean time, their assets can be utilized to cover the gap caused by their closing. For small business owners, this could be the best scenario since the longer they have until the end of the year, the better their chances of having their investment ready when the market turns around.
Financial market was one sector which suffered greatly during the recession, but the good news is that the situation has improved a lot since the last time that the reports came out. The number of downfalls recorded by various institutions has been reduced significantly, while the number of upswings has been increased quite significantly. This shows that things may be turning around for the better even though there is still some amount of pain involved. The bad news though is that this process may take some time to see the desired effects manifesting itself. As such, it is essential that financial institutions, especially the major banks, continue to maintain a healthy trading record for the current period of time to give the economy a boost.
Manufacturing saw its share of the economy reduced greatly during the recession which resulted in a large number of lost jobs. However, after the release of the mixed reports, it has shown signs of improvement and manufacturing is expected to experience more growth in the months ahead. Given the large number of factories that closed down in the United States during the recession, this may not be a good sign. If the number of factories that are currently operating is not enough to balance out the number of shut downs, then the number of employed people may not be enough to support the same number of businesses. If the number of employed people is less than the number of businesses running, then there may be an imbalance in the economy.
It is important that the number of bankruptcies per household is kept as low as possible in order to prevent inflation from eroding the purchasing power of the citizens. While it may seem like a good idea to save money on household purchases, there are better uses for the saved funds other than paying for household items. Saving may only bring inflation to the surface and may result into real devaluation of currency. Therefore, it is very advisable that people start saving money for the future so that they will have a firm foundation upon which to weather economic cycles.
In conclusion, it can be said that despite the current state of the manufacturing sector, the reports have showed a positive trend for the second half of the fiscal year. The manufacturing industry has been recovering over the past few years and therefore a brighter future lies ahead. This means that although the manufacturing sector may be facing challenges in the immediate near term, it is still expected to overcome these issues and continue on with strong growth in the years ahead. There are many factors which affect the health of a manufacturing sector. A wise decision to take would be to invest in a business that will provide long-term sustainable benefits for the company rather than the short-term ones which may be seen as a fad by consumers.