April 28, 2014 – While attending the International Factoring Association’s Annual Conference earlier this month, a few of Universal Funding’s team members had the opportunity to hear an economic update presented by Dr. Christopher Thornberg, founding partner of Beacon Economics.
Dr. Thornberg’s economic outlook was insightful, confirming there has been a shift from a bear to bull market which indicates increased investing and overall market confidence. Soft earnings are reported at a record high even with the weather issues at the start of 2014 that left a transitory impact on the economy. While these influences are all promising he added that overall the US economy is far from a full recovery. Bank credit remains tight, the construction market remains depressed, but those things considered, 2014 is proving better than 2013 seeing a 3% growth. This number is bolstered by the 200,000k jobs per month that are being reported by the labor markets. The industries adding the most jobs include tech, oil, and auto; the states experiencing the largest growth margins are California and Texas. Manufacturing is up hence earnings are up.
Brief comment about the banking industry and why the credit remains tight was due to three influences, 1) regulatory issues stemming from the 2008 collapse, 2) institutions are gun shy; 3) there is more competition, an influx of secondary lending markets.
“The economic outlook presented by Dr. Thornberg left our team and the industry cautiously optimistic,” recalled Universal Funding principal, Monica Wozow. “Businesses are ready to grow, and banks are still hesitant for lending, which makes invoice factoring an accessible option for those industries that are currently experiencing growth.”
The keynote speech was rounded out by addressing the real issues needing to be addressed if we wish to see the continued upward trend in recovery. The primary issue indicated was the cost of healthcare. Regarding healthcare cost, the cost of healthcare per person in the U.S. is $8,000 compared to $5,000 per person per year in Europe. Dr. Thornberg expressed that this is an issue that requires more attention and continued reform.
The team at Universal Funding feels privileged to be able to take in such an informative session with a talented thought leader in economic issues.