The TLMI Annual Meeting welcomed attendees to Orlando, FL, USA, for education, networking, and fun from September 29 to October 1. A wide range of experts presented on the latest trends, from sustainability and AI to workforce issues and regulations.

Alan Beaulieu, a fixture at TLMI events, returned to the Annual Meeting, where he provided an economic outlook. Using rate of change and other leading indicators, Beaulieu’s ITR Economics forecasts the global economy, especially in relation to the label and package printing industry.

According to Beaulieu, the US and global economies will pick up speed at the end of 2024 and keep that momentum through 2025-26. While the economy is expected to slow down in 2027, it’s not likely to go down. For label converters, the focus should be on maintaining enough cash to thrive during a period of prosperity.

“We’re going to see record high levels for the economy by the end of 2026,” said Beaulieu. “That means more demand for your industries. Most of you are going to have a really good life through the rest of this decade.”

The US continues to maintain its position as the top economy in the world. With a global GDP of $104.7 trillion, the US accounts for 26.1% of that figure. Plus, other economies are facing various difficulties, said Beaulieu. China and Japan are shrinking in global GDP because their populations are shrinking, leading to less labor, consumers, and taxpayers. More onshoring and reshoring is going to the US and Mexico, too.

“China’s problems are irreversible at this point, and they’re only going to grow larger,” remarked Beaulieu. “Meanwhile, India is doing well with population, and India will become a stronger economic environment going forward. It should be a strong hub for international trade, so there will be good opportunities there.”

In regard to the upcoming election, Beaulieu does not foresee either political candidate impacting the American outlook. “More inflation will be coming from both political candidates,” he noted. With inflation comes higher interest rates, which is part of your future. “We’re not going to see inflation go away. In fact, you should expect more inflation. We’re going into a period that will feel uncomfortable, where it might go to 8-9% by the end of this decade.

“It doesn’t make any difference to stock market or wages which party is controlling Congress or the presidency,” he added. “The people that matter are the people in this room, not in Washington, because this is where all the work gets done. The forecast won’t change regardless of which party gets voted into office. I can’t remember the last time we had to change a forecast because of what happened in a presidential election.”

However, there could be significant opportunities associated with the current economic state and continuing inflation. “I want you to remember we’ve been there before in the late 1970s, early 80s,” said Beaulieu. “When you look at the history of the economy, that was a period of significant downturn. People were still starting businesses, buying houses, and sending their kids to college. Inflation is not an end of the world scenario, it’s just how you deal with it. If you prepare for inflation, you can actually make a lot of money.”

While AI is emerging as a prominent industry trend, there is an economic impact with the technology – namely, electricity. Electricity and workforce are two other challenges the industry will need to grapple with. The forecast is for labor costs to move higher as 2030 approaches.

“AI takes a huge amount of electricity, and it’s going to be a question of why we didn’t see this problem coming,” commented Beaulieu. “Long term, expect electricity prices to rise relentlessly because of AI infusion, data center proliferation, EV adoption, environmental temperature realization, and a lack of diversity in energy sources and resiliency. We don’t produce enough electricity for the future. We’re not building new energy sources and not investing in infrastructure like we should.”

Beaulieu advised label companies to look at their companies in two ways: Do I need to borrow money to invest in my business for efficiency gains? And stop performing tasks that don’t need to be done anymore. “Become a better and smarter company,” advised Beaulieu. “You might not need the bottom 20% of your clients because they could be hurting profits. Revenue is for vanity, but it’s the profit that counts.”

Companies should target efficiency, clear competitive advantages, and strategic planning for acquisitions/divestitures.