To sustain this performance, we will have to win in challenging global markets. Some say we are in an “,” but I don’t really know what that means. I learn more from what I see in individual markets and hear from customers. Commodity prices are down significantly, primarily driven by oversupply. Resource industries and regions are restructuring. The dollar has strengthened, probably for an extended period of time. This puts pressure on American exporters. At the same time, commercial air travel is at a record high. Healthcare demographics and access will demand an increase in global spend. And one-third of the world’s population still lacks sufficient access to electricity. The global imperative for enhanced infrastructure investment has not changed. Growth is available, but you have to work at it.
What is unique in this cycle is the difficult relationship between business and government, the worst I have ever seen. Technology, productivity and globalization have been the driving forces during my business career. In business, if you don’t lead these changes, you get fired; in politics, if you don’t fight them, you can’t get elected. As a result, most government policy is anti-growth. In the U.S., we want exports but seem to hate trade and exporters; globally, governments love small businesses but then regulate them to death. And so, we perpetuate a cycle: slow growth, poor job creation, populism, low productivity, higher regulation, poor policy and more slow growth. We now live in a world where the most promising growth policy is “negative interest rates.” In the U.S., 2015 was the 10th consecutive year when GDP growth failed to reach 3%, a rate that used to be considered our entitlement.
The opinions expressed within this report are those of John Norris as of the initial publication of this blog. They are subject to change without notice, and do not necessarily reflect the views of Oakworth Capital Bank, its directors, shareholders, and employees.