In taking with many of the worldwide Synchro32 customer base and perspective customers, I am starting to become cautiously optimistic that the light at the end of the recessionary tunnel is getting brighter. The vast majority of Synchro32 customers are reporting an uptick in orders and the subsequent production. As these customers span many industries, I would gauge that the worst is over and that things are definitely improving. This is of course little comfort to the millions of Americans that have lost their jobs during this recession. Hiring and improvement in the employment category lags by many months if not years behind the true economic recovery. Now, not all customers are reporting an uptick - and this is probably primarily due to the industries that they serve and if they are not well diversified. The automotive market has improved, thanks to the infusion of money into the industry through the cash for clunkers program. Obviously this can not be sustained indefinitely. Only time will tell if the worldwide automotive sector can satisfactorily adjust to the new supply and demand curves.
When talking about a recession, one should ask what a recession is? A recession is where the GDP of a country, the Gross Domestic Product, declines for two or more consecutive financial quarters. Ok, then the question becomes what is the GDP? The GDP is a broad measure of economic performance that is arrived at by determining the total market value of all goods and services made or produced within a country.
What I can tell you is that Synchro32 continues to weather the recessionary storm very well. Customers are requesting additional services and training during these bad times so that they are better prepared in the good times. It's called being proactive. Additionally, the worldwide Synchro32 customer base continues to expand through new customers and software installations. Proactive customers are seeing the benefits of having a state of the art, worldwide industry leading software package that is flexible and dependable for meeting their ERP/MRP software needs. Synchro32 is literally a foundry in a software box.
Synchro32 has always been a cost cautious company that operates very lean. This is a guiding economic principal of resource utilization. Economics deals solely, as a fundamental principal, with the best use of resources. Synchro32 does an outstanding job of utilizing resources, in bad times as well as good times.
Of course, if there is to be a true recovery in the economy and an increase in the GDP, the consumer will have to have confidence that things are improving (consumer confidence) and that their continued employment is assured. The reason that the consumer really determines if there is a recession or not is that the consumer drives the vast majority of the GDP through the purchasing power of the dollar. If the consumer does not "consume" goods and services, then there will be no recovery. Unfortunately during this recession, there has really not been much done by the government, a fundamental purpose of government, in assisting the consumer. The average American consumer is being consumed by debt through housing, credit cards, auto loans, etc. Granted, interest rates remain low - but the amount of disposable income that the average American has available is very low. Disposable income is the amount of money you have left at the end of the month after you have paid your bills. This money can then be saved or spent.
During this recession and subsequent economic recovery, one thing has really concerned me more than anything and that would be another 9/11 terrorist attack within the United States. Obviously the US Government is doing everything possible to prevent such a thing, but if another 9/11 attack should occur - then the economic results would be catastrophic world wide. When the US develops a cough, the rest of the world gets the flu. It must be remembered that the stated goal of Osama bin Laden and al Qaeda is to destroy and bankrupt the American economy. SEE: Bin Laden: Goal is to bankrupt U.S.
http://www.cnn.com/2004/WORLD/meast/11/01/binladen.tape/index.html
This ends the economic 101 lesson for today!
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