Think Strategically, But Act Tactically
Manufacturing and construction are picking up in the United States, but it's still likely to be a year of modest growth, so companies will need to focus on boosting efficiencies.
Jan 09, 2012—The new year got off to a pretty strong start in the United States, economically speaking. Not long after the ball dropped in Manhattan's Time Square, ringing in the arrival of 2012, reports came in that manufacturing had grown last December at the fastest pace in six months, and that unemployment had dropped to 8.5 percent—its lowest level in almost three years. Construction of new housing is up, and so is consumer confidence.
The U.S. stock market closed up on the first day of trading, and when that happens, stocks are almost always up for the year. Still, the U.S. economy is hardly booming—housing construction is about half of what it should be, for example—and there are some worrying signs that the sovereign debt crisis will have a major impact on this year's economic growth in the region. In addition, China's manufacturing sector is slowing down.
Smart companies are planning to use this period to boost efficiencies—not just to improve the bottom line, but also to enhance competitiveness for when the economy does inevitably grow. Others are saying that they can't invest because their margins are under pressure. I think it's a mistake to sacrifice long-term competitiveness for short-term profitability—and it's not necessarily an "either/or" choice. Companies can invest in RFID and other new technologies, and still maintain profitability.
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