THE SHOP

January '19

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8 THE SHOP JANUARY 2019 "Rising wages are very good for the economy," says John Manzella, a consul- tant on economics and global business in Buffalo, New York (JohnManzella.com). "The more disposable money consumers have, the more they spend. And consumer spending represents 70 percent of the nation's economy." The growing flurry of paychecks seems to be a more important consideration for people than any negative economic news. "Consumers are not worried about the effects of a possible trade war, or gridlock in Washington, or the rise in gasoline prices that has taken place over the past year," says Hoyt. That last one, of course, is of particular interest to specialty aftermarket retailers. HOUSING REBOUNDS A powerful driver of consumer sentiment and economic growth, the housing market should deliver good news in 2019. Housing starts are expected to rise by 19.4 percent in 2019, a substantial increase over the 7.0 percent expected to be clocked when 2018 is finally tallied. Median home prices should rise by 2.7 percent, slower than the 4.8 percent of 2018. The challenge for home builders is finding enough workers. "Residential construction as a whole remains bedeviled by a shortage of capacity," says Koropeckyj. "The unem- ployment rate for experienced construction workers is at a record low of less than 5 percent, suggesting that construction labor for the U.S. as a whole is critically short." Shortages in workers with certain skills, such as electricians and steel-erection spe- cialists, are particularly acute. Pricing increases are expected to be the key to success in the months ahead. Lower unemployment rates can mean higher wages—good for employees, but some- times hard on profits. Riding the Economic Boom

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