By Kimberly Pistone

For the Sidney Daily News

SIDNEY – The keynote speaker at the 35th Annual Economic Outlook Luncheon shared a hopeful outlook with attendees on Oct. 10.

Nick Ng, Investment Committee chair and Lead Portfolio manager at Liberty One Investment Management, graduated with a degree in finance from the University of Wisconsin- Whitewater first in his class at the age of 19. He lives in Arizona and said he appreciated the cooler weather here in Sidney.

Ng explained that while some of the economic indicators are predicting a recession, many of the indicators are saying the opposite. He said, “Today, our economy is a lot more resilient.”

Some of the positive indicators Ng spoke about include: the Central Bank has only reversed 20% of the stimulus added since Covid 19, there are more new construction projects in the past two years than the previous eight, and many companies are coming back to the US which is adding jobs. These, along with other factors, support the consumer, showing the resilience of the economy. Ng believes that the economy needs to slow down so that supply can catch up.

A concern that Ng noted is the high unemployment rate. However, he said that unemployment goes up for two reasons: mass lay-off and people entering the workforce while others are not leaving. The current unemployment is not due to mass lay-offs, which would be indicative of a recession. During the question and answer portion at the end of the luncheon, Ng elaborated the worker shortage was due to a combination of factors, including less immigration and more young people entering the workforce while many older workers are either not retiring or returning after retirement with concerns about outliving their funds. Additionally, there has been a dramatic rise in new business applications which leaves a hole where the new owner left, while potentially creating new jobs which also need to be filled.

Another concern is higher interest rates. According to Ng, this tends to have little effect on most consumers since most current mortgages are long-term fixed interest below 4%, unlike the crash in 2008 when most mortgages had a variable-rate interest. He also noted that many people refinanced in recent years when rates were low, and that currently homeowners spend on average 21% of their income on their mortgages compared to the historical trend of 28% of income going to their mortgages.

According to Ng, recessions historically begin when the fed cuts rates, not when they raise them. Ng said, “The economy remains resilient but faces many near term challenges. It will likely be slower in 2024 than in 2023. But this does not mean recession.”

Ng asserted that the long-term economic outlook remains bright, not just in the US, but globally. “Industries that don’t exist today will dominate the future,” Ng stated. He used the example of refrigeration. It didn’t exist until 100 years ago, but now it is a $110 billion market that supports industries that wouldn’t exist without refrigeration, like beer ($794 billion), soda ($328 billion) and frozen foods ($265 billion).

Ng also pointed out 20 years ago there was no phone app market, and now it is a $476 billion industry. He pondered what might be the big industries in 20 years: genetic based medication, driverless cars, or even 3d printed foods. Any of these industries will create new technologies. These technologies will not replace workers, but provide workers with new tools.

“We tend to overestimate the short-term challenges and underestimate the long-term opportunities,” Ng said. He continued, “My honest opinion, the economy is likely going to slow, so where do I invest? I implore you to not lose sight of the tremendous opportunities ahead.”