Rick Nelson

AIA hears economic forecast
February 3, 2007

I had the opportunity this week to attend the Automated Imaging Association’s annual business conference in Orlando, Florida, where nearly 200 machine-vision industry executives heard presentations on the global economy in general and the machine-vision industry specifically. Kicking off the conference was a presentation by Dr. Sung Won Sohn, president and CEO of Hanmi Financial Corp. and formerly executive VP of Wells Fargo Banks, who discussed the US economy in general.

His comments were mostly encouraging as he cited what he called the US economy’s resilience. He said that despite oil having spiked to $77 per barrel and the Fed having raised interest rates 17 times, the economy isn’t in recession. Certainly, he said, housing is a soft spot, directly affecting builders and, through the reverse wealth effect, indirectly affecting consumers.

Observers often bemoan the decline of manufacturing in the US, and indeed, Dr. Sohn said that service jobs now constitute 87% of all US jobs. But that’s good news, he said, because service jobs—particularly in the health-care and financial industries—now pay more than traditional manufacturing jobs. In response to a question, however, he cautioned that the US must maintain manufacturing capability in high-tech as well as low-tech industries. The US mustn’t forget how to make vacuum cleaners, he said, alluding to the sale of the Dirt Devil brand to a Chinese firm.

Finally, he said that he expects interest rates to remain stable. Cuts are unlikely, he said, because of tight labor markets and inflation threats, but he also sees increases unlikely because of a softening economy.

You can find Dr. Sohn’s detailed economic analysis and commentary on his Website: DrSohn.com.

I’ll provide other impressions of AIA conference events in future posts.

Posted by Rick Nelson on February 3, 2007 | Comments (0)