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ASSN OF EQUIPMENT MFGRS ISSUES ECONOMIC OUTLOOK REPORT
Source: Association of Equipment Manufacturers (AEM) news release

MILWAUKEE - While the global economy remains firmly on track to expand in 2022, a number of challenges are poised to serve as obstacles for the agriculture and construction equipment industries in the weeks and months ahead.

According to the latest business intelligence data from AEM, the global economy expanded by a robust 5.1 percent in 2021. And while projected growth of about 3.9 percent is expected for 2022, slower growth seems like a foregone conclusion. Short-term factors like the lingering COVID-19 pandemic, ongoing supply chain issues and persistent labor shortages, as well as long term factors like deglobalization and inflation, have emerged to dampen enthusiasm a bit on the heels of what has been a strong economic resurgence worldwide.

"The last recession we experienced ended the longest period of economic expansion in the United States, and that recession lasted from February 2020 to April 2020," said AEM Director of Market Intelligence Benjamin Duyck. "Two months, in traditional economic terms, can't even be accurately described as a recession. However, this economic disruption has impacted us all greatly, and we are still dealing with the aftereffects today - labor shortages, supply chain problems and higher interest rates."

CONTINUED GROWTH ON THE HORIZON

The question of when the next economic recession will hit is one that's easily asked, but not so easily answered. Recent volatility in the stock market has done little to quell concerns. However, the stock market is still up 20 percent when compared to a year ago, and 30 percent from two years ago (just prior to the onset of the COVID-19 pandemic).

"Can we accurately predict the next recession?" asked Duyck. "No, and it's a common joke that economists predicted 15 of the last 10 recessions. In other words, they are frequently wrong and pessimistic. Though, it will be interesting to see what happens, especially with high inflation."


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