As the stock market seems to gyrate with every day’s news, it is easy to buy into the exaggerated sense of fear some days and overwhelming confidence other days. However, the local economy seems to be a lot less volatile than that, and this summer, we’ve experienced solid and steady growth from our local manufacturing clients.
I couldn’t help but notice Lam Research stock (LRCX) go from $1,134 a share to $760 in less than a month (July). While fear might spread like wildfire, Lam isn’t going anywhere. When any bad news about the future, or a specific company, is released, so many investors run for the exits, but generally things stabilize, as I’m sure they will with Lam. I will not be surprised to see its share price back over $1,000 in the coming months.
My point is that while we see so much volatility in the national market, our local companies persist, doing what they do, and more often than not, ultimately prevail.
Hiring is up. Clients are busy. Most seemed to have shaken off the fear that permeated in 2023, and this summer is nothing like last. While this will not tip the scales of the larger economy, I thought it important to report what is happening in the commerce I see in our local market, as the news is clearly positive.
While I recently pointed out the future closure of Pacific Foods, which means layoffs for hundreds, other companies are gobbling up their amazing employees left and right. While this might seem like a straight trade at first glance, the truly local companies that are getting these skilled workers might benefit our local economy even more as their dollars will remain here.
Even as we see unemployment tick upwards, it’s actually a very healthy sign for our economy. When hiring becomes too tight, the employers tend to lose, as they are often forced to simply take what they can get. Now that they are back in the driver’s seat, as we have seen with this transition to an employer’s market from an employee’s market, their hires are of a higher quality which will only increase their efficiencies going forward. The better hires they make now, the better it is for the companies in the long run. Turnover is a killer, and with unemployment inching up, people are more likely to value their jobs and keep them, reducing costly turnover.
So, just as is the case with the stock market, it is easy to overreact to bad news, but so often once the dust settles, we ultimately see positive growth just as we are seeing right now on a local level.
If there was a mutual fund speculating on the success of our local manufacturing sector, I’d definitely be a buyer.
