RV PRO

January '19

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rv-pro.com January 2019 • RV PRO • 169 of money pose a challenge for everyone, especially if the Federal Reserve raises rate too quickly. "Rising interest rates may not cause much impact in the short term," says Palisin. "But later in 2019, the higher cost of money may start to constrict the availability of capital." • Health care costs. "On the cost side, health care is still a concern," says Palisin. "Some 70 percent of our members report an increase in medical costs over the past year. Again, there is a lot of unpredict- ability in that sector. Will the Affordable Care Act continue? Be replaced? And will that result in higher costs? Employers don't know where all this is going." • A "hard Brexit." If The U.K. fails to land a favorable deal with the European Union, an unmoderated departure can cause problems to the world economy. "We expect a Brexit deal to be reached at the last minute," Hoyt says. "If it is not, it would be a negative for the global economy and U.S. consumers as supply chains and movement of workers would be disrupted." Business Cycle Ages To look a bit further down the track, there are signs that the fast-moving eco- nomic carriage may be nearing the top of the roller coaster. "The nation is experiencing robust economic growth, tightening labor and product markets, intensifying wage and price pressures, monetary tight- ening, and higher interest rates," says Koropeckyj. "These characterize a busi- ness cycle nearing its end, just prior to a recession." When might that event occur? "We prefer not to forecast recessions, because they are often caused by shocks that cannot be predicted," Koropeckyj says. "However, our forecast for 2020 includes a set of conditions that are con- sistent with a recession. While we do not expect the textbook definition – two quar- ters of GDP decline – to occur, real GDP growth is expected to slow to a crawl." Other relevant predictions include a too-rapid increase in unemployment, the cessation of job growth, flat industrial production, and a deceleration of per- sonal income growth. For businesses of all stripes, the pru- dent course seems to involve capital- izing on the current good times while setting up Plan B for the inevitable correction. "Businesses are optimistic about 2019, but we are all aware that recessions are cyclical," says Manzella. "And there is no doubt that the next recession is on its way. The only question is when." from page 167 Offer your customers Compass RV Service Contracts, Tire & Wheel Coverages, GAP, and Appearance Protection Products. AGWS provides great customer service, fast handling of claims, training workshops, reinsurance, and so much more. Let us help you grow your business! • F&I Products • Service • Training • Technology • Claims Administration For more information, contact Kurt Harbeke at 800.579.2233 x4213 or kharbeke@agwsinc.com. 800.579.2233 | agwsinc.com

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