Will Higher Interest Rates Dampen Demand or Reduce Labor Costs?

With the recent rise in interest rates dampen demand or reduce labor costs for companies in our region? From what we see in deep supply chain industries like industrial, energy and healthcare, we think not. As evidence, consider energy. Drilling has increased 60% in the past 12 months. Nearly 36 petroleum or natural gas pipelines will be completed by the end of 2025. And the new spending/climate/energy package passed on Aug. 7 will expedite dozens of other pipeline and fossil fuel infrastructure projects (clean energy in the form of windmills and solar is a huge part of this package as is health care; all these projects will increase spending and jobs). The bottom line is that leverage industries like energy, industrials and healthcare are creating demand for employment, materials, components and finished products. Products that require skilled and unskilled labor in manufacturing and skilled labor in post-sale service support. It’s a good time to be making something.