Sunday, October 26, 2008

Another Reason the Current Crisis is Going to Hurt

"Consumer spending accounts for more than two-thirds of the U.S. economy," is a quote from an article by David Lazarus in the LA Times.

U.S. retail sales fell in September for the third straight month -- the first time this has happened since the government started tracking such data in 1992. The holiday shopping season is expected to be the worst in years. But some forecasters are predicting that spending will pick up by the middle of next year as consumers shake off the recession blues.

Now is the time to consider how well our factories and workshops have been capacitized. With orders declining how will production be reduced? Will an expensive large integrated line have to be run for one shift a few days a week? Or, will is be run with fewer employees to meet the new output requirement?

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