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GT Podcast – Community Connection Series – Episode 12 – Going Global Live Expo

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GT Podcast – Community Connection Series – Episode 12 – Going Global Live Expo

In today’s episode of Community Connection, we speak with Going Global Live’s Event Director, Reggie Chard, to learn about a trade show that is truly taking over the world.  We will see why someone should attend and how someone could benefit from exhibiting.  We are also going to take a look at the importance of globalization in our world economy.

For more information on Going Global Live,  visit

Check out more of our GT Podcast – Community Connection Series here!

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GT Podcast – Community Connection Series – Episode 11 – Junction City: ELITE City of Kansas Taking Growth to a New Level

In this episode of Community Connection, we will speak with Economic Development Director,  Mickey Fornaro-Dean, to learn about what makes Junction City, Kansas such a special and unique opportunity for business. What are the workforce, transportation, and land opportunities that are being capitalized on? And what the heck was Custer doing in this opportunity-rich community?

For more information on Junction City-Geary County Economic Development Commission,  visit

Check out more of our GT Podcast – Community Connection Series here!

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GT Podcast – Community Connection Series – Episode 8 – Snyder: The Unknown Secret for Business in West Texas

In this episode of Community Connection, join GSLI’s Eric Kleinsorge as he speaks with Doug Dowler to learn why Snyder, TX is such an unknown secret to business, find out if it’s true we can find a white buffalo around the courthouse, and how this small town delivers a highly educated and affordable workforce.

For more information on the Development Corportion of Snyder, TX visit

Check out more of our GT Podcast – Community Connection Series here!

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How Outsourcing Packaging Can Improve Your Business

You might feel inclined to do everything independently when you start a business, from production to marketing, customer management, and packaging all done by a single company, beneath one roof. But, as you’ll soon learn, the modern economy can heavily incentivize you to outsource various aspects of your company.

Especially those that either take up to much workforce or require too much space. So, in this article, we will explore why outsourcing packaging can improve your business and how to find a decent company to do so.

Ways in which outsourcing packaging can improve your

When considering packaging, people often believe their team can handle it best. After all, what better way to connect your production to your packaging process than to have them done in the same building. And while this is theoretically true, it doesn’t paint the whole picture.

While packing your product can be more efficient, you must have the necessary space and workforce to make it so. Furthermore, just because your packaging process is efficient doesn’t mean that you will see an increase in revenue. Packaging speed is relevant for specific items, especially if you have the necessary storage space. Therefore, you’d be spending a lot of money to make your packaging process efficient while not getting anything in return.

Reduce business cost

With what we’ve said in mind, it shouldn’t come as a surprise that cost reduction is the first-way outsourcing packaging can improve your business. Namely, unless you have everything already set up, it will likely be more cost-effective to outsource your packaging to a third-party company. Yes, you will have to take shipping and storage into account, as well as some extra planning. But you can save a considerable amount of money.

Focus on your area of expertise

Properly managing a packaging department within a company requires resources. These do not only include the human resources that will pack your product and the space necessary for them to do so. But, it also includes further management staff. As you can imagine, all these resources can be saved and diverted into your area of expertise if you opt to outsource your packaging. Instead of worrying about whether you have proper packaging materials, whether your logo turned out right, and whether the staff is properly managed, you can focus on what you do best. Doing so will further improve your company and make the most of what you
already have.

While we are on the subject of recourses, it is worth mentioning that time is the most valuable resource, especially for a company manager. The time you will free up from outsourcing your packing can be used to improve your company further and increase overall revenue.

Finding a good packaging company

The only sure way in which outsourcing packaging can improve your business is if you find a good packaging company. All that we’ve mentioned so far will be for naught if you pair yourself up with subpar packers. The shipping, packaging, and storing process can be pretty complex, especially if you have a strict timeline. Therefore, it is in your utmost interest to do ample research and ensure that you pick the right packaging company for outsourcing.

Online reviews and ratings

The first step in finding a decent company to work with is to check online reviews and ratings. Any reputable company will be easy to find online on Google and the BBB website. What you are looking for are decent ratings from verifiable customers. Working with
companies that have little experience is a risk. And if your company heavily depends on the quality of the packing service, you should take as few risks as possible. Look for ratings and reviews that you know are credible, and see whether you can find companies similar to yours that worked with them previously.

Setting up for the long run

The idea of outsourcing your packaging implies that you will make a long-term business relationship with the packing company. As such, you not only need to research them, but you also need to outline your needs. Things like:

All of these are essential factors that you need to keep in mind. So don’t expect to set up a decent relationship with a simple phone call. Once you pick companies with suitable ratings and reviews, you will need to perform an interview. And during that interview, you must go over every aspect of your future business relationship. A contract outlining who is responsible for items and when is a must, and so is having a clearcut insurance policy.


It won’t take much experience to learn that outsourcing packaging can improve your business. You will not have to worry about the packaging process, which can be surprisingly difficult to
manage. You will also have more time and energy to focus on developing your business.
Considering the cost of setting up packaging within your company, with all the necessary supplies, staff, and extra space, you will soon see that outsourcing packing is often the more financially sound option. Nevertheless, working with a reputable company is the only way to reap the benefits of outsourcing your packaging. Reviews and ratings are your first step in finding a good company. And the rest are all about understanding your business needs and finding a company that will suit them.

Author bio

Amanda Waterson worked as a logistics manager for various shipping companies. She now focuses on consultation work and on writing helpful articles for companies like In her free time, Amanda enjoys gardening.




Manufacturers operate complex supply chains that, in many cases, involve the movement of raw materials and resources from different parts of the world into their factories. 

It is an ever-moving puzzle. Indeed, manufacturing firms are often at the mercy of a range of factors outside of their control that can lead to disruptions, difficulties and, in extreme circumstances, halts in production. 

A timely reminder of this came in March when a 400-meter-long container vessel, the Ever Given, ran aground in the Suez Canal, blocking the waterway that is responsible for the safe passage of billions of dollars’ worth of goods and materials every year. Around 12% of global trade, including 1 million barrels of oil and 8% of liquefied natural gas, passes through the canal each day.

The blockage, caused by high winds, took six days to unjam and even took a human life in the process. Hundreds of other vessels were also delayed, a pile up which is thought to have consisted of almost $10 billion of goods.  

Meanwhile, as well as relying on the safe passage of goods from around the world, manufacturers are also having to take sustainability issues more seriously than ever before. 

In November, world leaders, including President Joe Biden, gathered in the U.K. for the 2021 United Nations Climate Change Conference, better known as COP26. Here, several key pledges were made to help move the world toward carbon neutrality, and there is no doubt that private sector organizations will have to play their parts in helping societies to successfully transition. In many cases, this could mean reassessing supply chains and the origin of key materials.  

Indeed, what if such materials were able to be sourced closer to home? 

There are various studies pointing toward consumers’ willingness to pay a premium for more sustainable products. IBM, for example, found that 57% of consumers are willing to change their purchasing habits to reduce negative environmental impacts, with 70% saying they would pay a premium of 35 percent, on average, for brands which are sustainable. Cheaper sourcing from abroad, it seems, could be compensated by customers who are willing to pay more for home-grown products. 

And the U.S. is home to an abundance of natural resources that are already supporting key manufacturing endeavors. Here, we explore just a few examples across states that can offer certain nearby manufacturers a competitive advantage.  


The U.S. is home to some vast areas of woodland that support key industries reliant on this versatile raw material. 

Globally, demand for wood-based products is steady. Indeed, the wood manufacturing market is projected to reach $502 billion in value by 2027, up from $442 billion in 2020–growing at a compound annual growth rate of 1.8% during the period. 

In America, according to the U.S. Forest Service, the forest products industry is among the top 10 manufacturing sector employers in 48 states. In terms of finances, this activity generates more than $200 billion a year in sales and pays about $54 billion in wages. 

The total amount of land covered by forests in the country is estimated to be around 750 million acres, with Alaska by far the most forested state. Oregon and California follow in second and third respectively. 

Several key industries are supported by this abundance of wood resources, including paper and pulp, furniture and construction. Moreover, around two thirds of American forested land is timberland, which is capable of producing industrially utilized wood. 


States home to a thriving agricultural scene could provide homegrown advantages to all manner of businesses, especially those operating in the food production supply chain. 

While there are many factors which determine the attractiveness of an area in regard to farming, soil quality is arguably the most important. 

In the U.S., mollisols are widely recognized to be the best growing soils due to a range of properties–namely, they are extremely fertile and of neutral pH. 

Resultantly, they constitute a large part of the country’s Wheat Belt and the wheat-growing area of Palouse in eastern Washington, with Illinois and Iowa also home to this favorable farming soil. 

Vermont is another state recognized for its high soil quality. While home to a variety, its official state soil is Tunbridge, which is described as “loamy and acidic” in nature. The state equally ranks highly across several factors such as farming infrastructure and investment. 

Agriculture also thrives in Nebraska. Here, the official state soil is Holdrege, which facilitates high yields because of its natural fertility and excellent moisture retention capacity. This translates into financials, with Nebraska’s corn yields being the third largest in the U.S. and worth $6.3 billion in 2018. 

California, however, is by far the country’s most prolific agricultural state. According to the latest figures from the U.S. Department of Agriculture’s Economic Research Service, California is responsible for 13.5% of all agricultural revenue in America. 

In 2020, the state recorded receipts of more than $49 billion across all agricultural commodities, nearly double that of Iowa ($26.2 billion) and 2.5 times the value of agricultural activity in Texas ($20.2 billion). 

There are many reasons why California is so well suited to growing crops. Not only is the western state home to some extremely fertile soil, but its climatic conditions also ensure the most is made of the quality of the land. It is the leading producer of a range of commodities, including wheat, lemons, oranges, grapes and avocados, and is among the most prolific grower of commonly consumed vegetables such as onions, lettuce, broccoli, carrots and mushrooms. Indeed, California produces more than 200 varieties of crops, with some being exclusive to the territory. 

This translates into an enticing prospect for businesses which rely on or work with a vast array of farmed ingredients. Rather than ship them in from abroad, setting up or sourcing from closer to home could provide sustainability, financial and risk-reducing supply chain advantages.


As well as abundant forests and vast swathes of prime agricultural land, the United States is also home to an array of minerals that serve all kinds of industrial activities. 

In 2020, mines across the country produced more than $82 billion worth of minerals, according to figures released in the 26th annual Mineral Commodity Summaries report from the USGS National Minerals Information Center. 

“Industries–such as steel, aerospace and electronics–that use nonfuel mineral materials created an estimated $3.03 trillion in value-added products in 2020,” said Steven M. Fortier, director of the USGS National Minerals Information Center.

In terms of metals, mine production in 2020 was estimated to be $27.7 billion, which is around 3% higher than that in 2019. 

Key contributors to this total value were gold (38%), copper (27%), iron ore (15%) and zinc (6%), with a total of 12 mineral commodities each having been mined at a value of more than $1 billion in 2020.

Geographically, several states are home to sizeable mineral mining activities. In 2020, 12 states each produced more than $2 billion worth of nonfuel mineral commodities. The states, ranked in descending order of production value, were: Nevada, Arizona, Texas, California, Minnesota, Florida, Alaska, Utah, Missouri, Michigan, Wyoming and Georgia.

It is also important to note that some industries in the U.S. rely heavily on imports. In 2020, imports made up more than one half of U.S. consumption for 46 nonfuel mineral commodities, with 17 minerals being wholly imported. These imported minerals are key materials for a range of industrial endeavors, including renewable energy generation and storage, as well as infrastructure technologies.

However, there is no doubt that the U.S. offers opportunities for enterprises reliant on a range of mineral resources, as shown by those 12 states that achieved more than $2 billion in output. 

Here, we explore a few of the country’s most abundant and valuable mineral commodities: 


Gold needs no introduction. One of the most iconic minerals, it has symbolized prosperity and formed the basis of currency through the ages. 

However, gold also carries a huge number of industrial uses that stretch far beyond coinage and blocks being stored in bank vaults, thanks to a myriad of special and diverse properties that make it incredibly useful. Some of these include being a conductor of electricity, non-tarnishing, very easy to work and able to be drawn into wire and hammered into thin sheets. Moreover, gold can be melted and cast into highly detailed shapes, offering a unique and appealing color and a desirable sheen.

All of this means gold is highly sought after across many industrial practices and sectors. In electronics, for example, devices use very low voltages and currents which are easily interrupted by corrosion or tarnishing at various contact points. Gold is a reliable conductor that can overcome this problem. Indeed, it will be found in almost every sophisticated electronic device, from smartphones and calculators to GPS systems and home assistants like Alexa. 

In terms of gold production in the U.S., the west of the country is where most deposits are found. Nevada and Alaska are the states that lead the production rankings from both lode mines and placer deposits, these feeding primarily into jewelry, electronics and coin-making activities.

In 2016, around $8.5 billion of gold was produced across the U.S., translating into 209 metric tons.   

Crushed stone 

Somewhat less glamourous than gold, crushed stone is an equally important mineral commodity produced in high quantities and serving critical industrial activity. 

According to USGS National Minerals Information Center figures for 2016 (the most recent available), the value of American crushed stone output, which includes limestone, dolomite and granite, reached $16.2 billion. 

The vast majority of crushed stone supplies the construction and ongoing upkeep of the United States’ transportation network. In 2016, more than three quarters of crushed stone went into road construction and maintenance, with another 11% going into cement manufacturing activities and 7% being used in lime production.  

Companies working with these materials (especially those producing various construction aggregates) will therefore likely be based in states where crushed stone output is highest in order to gain a proximity advantage. This is important, as crushed stone is a heavy material of relatively low value per ton, meaning any savings that can be made on transport will greatly increase financial viability. 

A handful of states are resultantly responsible for more than half of the U.S. production of crushed stone. These are Texas, Pennsylvania, Florida, Georgia, Illinois, Missouri, Ohio, North Carolina, Virginia and Kentucky. It should also be noted that small amounts of crushed stone are imported from the likes of Canada, Mexico and the Bahamas. 


Another important mineral supplying the construction sector is copper. One of the first metals ever mined and used by humans, it has played an influential role in the shaping and evolution of civilizations. 

It remains the fifth most valuable mineral mined in the United States. In 2016, 1.41 million metric tons were produced, generating $6.8 billion in revenue–most of it deriving from sites in Arizona, New Mexico, Utah, Nevada, Montana and Michigan. 

Some 44% of this copper supported construction sector activities, with 19% being used in the production of transportation equipment and another 18% going into electric and electronic products. 


Buying a New Warehouse: Tactics for Logistics Companies

When launching a logistics company, the location of your warehouse is intrinsically linked to overall success. As well as the location, you need to decide whether to lease or buy a warehouse. Further, if you are looking to grow, you need to ensure that your location has the availability to do so. You will save a lot of time if you only have to run through these considerations once. Throughout this article, we will outline key considerations to make when buying a warehouse.

Workforce Availability

You will need a team to fulfill your work and having a qualified workforce will make your life easier. When you’re looking for a new warehouse, you will need to consider the demographic you’re moving into. For example, you won’t find success if you pick a warehouse in Silicon Valley because the demographic belongs to tech-savvy programmers. When you are hiring, you need to look out for areas with a large proportion of logistic businesses. You need to get a fine balance between availability and trade in the area. If you move into a business where demand for workers is high, you will find yourself competing against high salaries.


Rent Costs

The cost will be a critical factor in deciding where to buy a warehouse. After all, if you don’t have the available funds, you may be forced out of your desired location. In the US, warehouse rental costs are divided up per square foot (SF). The highest average prices at the moment are in San Francisco, CA, with $16.50 per SF. On the other end of the spectrum, Memphis, TN, comes in at only $2.56 per SF. Although the rental rates may be lower in some cities, you need to ensure you check state tax rates. You don’t want to be stung by hidden costs because you didn’t do your homework.


Whether you rent or buy, you are putting valuable assets in the warehouse and you need insurance to protect them. Having insurance for your commercial property means that you are covered for unforeseen repairs, loss of income, damage, and operation expenses. Typically, you are looking at $17 to a month for the insurance. This may seem like a worthless investment in months where nothing happens, but as soon as it does, you will wish you had it.

Nearby Transportation Hubs

When choosing a location for your new warehouse, you need to make sure it’s close to transportation hubs. To do this, analyze your most significant point for receiving goods and align your site with this. For example, if your cargo typically arrives by air, you should position yourself closer to an airport. The closer you are to your nearest source of export, the higher demands you can come with and the easier it will be to manage drayage.

Traffic and Access

The main objective of logistics is being able to move cargo from A to B. If you don’t have the industry in the area, then your business will fail. You need to analyze all aspects of the local area including peak traffic times, average speed limits, typical traffic volume, road conditions, highway connectivity, and accessibility to highways. If these factors aren’t perfected in the area, you will end up paying more than you need to in fuel consumption.

Environmental Factors

As well as being close to significant export locations, you need to find a warehouse near to other suppliers. You will need to research the large local suppliers and take into account any supply chain partners.

As well as suppliers, you need to assess the environmental factors of the nearby areas. Is the area prone to natural disasters? Will you benefit from intense sunshine? Or are you in the middle of a flood zone? If you find any of these risks at your proposed site, you need to ensure that the building adheres to certain building requirements.

Starting up a logistics business takes a lot of time and patience. You need to decide what the most important location factors are and tick them off. There will always be criteria that you have to let slide. Make sure that you carry out your homework and consider all aspects of the location.


Big Dreams, No Cash; Funding Your Brick-And-Mortar Business

The digital world made starting a business easier. Anyone with a computer, a phone and a spare room could give entrepreneurship a try, no office or storefront necessary.

Or so it would seem.

In truth, not every business can operate without a brick-and-mortar presence. Cyberspace isn’t sufficient when a budding entrepreneur wants to open a bowling alley, laundromat, car lot, restaurant, motel or any number of other businesses, says Elijah McCoy, CEO of McCoy Brokerage Service (

“That means they need to buy, rent or renovate property, and purchase equipment,” McCoy says. “That also means they are going to need the capital to turn their entrepreneurial dream into an entrepreneurial reality.”

But securing that capital is not always easy. Entrepreneurs who want to launch a small business, or small businesses that want to expand, often find that lenders are reluctant to provide the cash they need to make their vision happen, McCoy says.

Yet the need is growing. Since the pandemic, the number of people who feel the urge to start a business has increased dramatically. The U.S. Census Bureau reported that 5.4 million new business applications were filed in 2021, up from 4.4 million in 2020.

Many of those people were part of the Great Resignation, the movement among millions of Americans to quit their jobs and refocus their lives. In numerous cases, that refocusing involved people who longed to be their own boss. But as McCoy points out, being your own boss also means taking on responsibility for overhead expenses – possibly including real estate – that someone else handles when you are an employee.

“Sometimes business owners or would-be business owners go to lenders and they think they have a great idea,” he says, “but for whatever reason the lender rejects their application.”

The key is to not give up, he says. If one lender says no, it’s time to find another one.

“There are options out there,” McCoy says. “You just have to persevere until you find the right match.”

Some of those options include:

Conventional loans. A conventional loan for a business is somewhat similar to a personal loan. Banks, credit unions and other financial institutions offer them and, just as with a personal loan, the business borrows a lump sum and repays it over time, along with interest and fees. With conventional loans, though, borrowers may face more stringent requirements to qualify than with some other types of loans.

Small Business Administration loans. The Small Business Administration is a government agency that partners with private lenders to provide loans to businesses. McCoy says this can be a good option for businesses unable to secure a conventional loan, but certain requirements still must be met to qualify. In fiscal year 2021, the Small Business Administration provided 61,000 loans totaling $44.8 billion to small businesses.

Hard money loans. A hard money loan usually isn’t the first option when someone is seeking to purchase real estate for a business, but these loans do have advantages, McCoy says. The loans typically are based more on the value of the property than the creditworthiness of the borrower, and the closing can happen much more quickly – sometimes within 48 hours of the appraisal review. Unlike with conventional loans or SBA loans, hard-money lenders usually are private individuals or companies, as opposed to a bank or credit union.

“When you are seeking a loan for your business, it’s a good idea to shop around,” McCoy says. “You want to get the best deal possible for what you are trying to accomplish, and it’s all the better if you can find and work with someone who understands your needs. Ultimately, you want to match your objectives with the most appropriate lender in the most timely manner.”


Elijah McCoy is CEO of McCoy Brokerage Service (, a company he founded in 2006. McCoy’s firm works with businesses throughout the country that are trying to secure financing. Much of McCoy’s clientele is in healthcare, such as doctors, dentists and pharmacists, but he also has worked with a broad range of people in other industries. He is a certified commercial loan expert and financial consultant.


US Fed: A fata morgana hiking cycle?

In early January, the US Federal Reserve’s communications pointing to more hikes and an earlier balance sheet run-off, together with CPI reaching a yearly rate of 7% in December, have triggered a surge in long-term US yields. Over a short span of two weeks, US 10y Treasuries yields rose 24bp from 1.5% to 1.75% and temporarily reached 1.9% (Figure 1).

Figure 1: Evolution of US 10y Treasury yield (last 2 months).

In total return, this was the largest decline of 10Y US Treasuries over the last four decades. Only in February 1980, when Chairman Volcker raised the Fed Funds rate to 21% did long-term US Treasuries have a worst two-week performance, and this was against the background of much lower growth than today. For some, this is enough to (once again) claim the switch to a new regime, where “low for longer” is replaced by rising yields, driven by higher inflation uncertainty and growing interest rate risk. For us this view reflects mostly tactical noise rather than the underlying dynamics of recent yield movements. Over the recent days, US 10y Treasury yields have consolidated again at 1.74%.

Bonds markets seem have become more confident about the near-term US recovery rather than worry about incipient stagflation. The components of US nominal yields show that the recent increase was not caused by the risk component (term premium) but by a higher expected nominal short-term rate. The inflation expectations embedded in this rate remain stable, but the implied expectations for the real rate have risen (real short-term rate). The real short-term rate is closely linked to the economic outlook. In other words, the recent yield movement can be explained by increasing confidence among market participants that the upcoming Fed rate hikes (four hikes are currently priced in for this year) are appropriate and will not derail real growth. However, residual skepticism remains. The risk premium associated with the real short-term rate (real term premium) remains negative indicating limited potential for higher longer-term rates in a sustained growth cycle. Thus, we are not dealing with a risk surge, but with a re-rating of the growth scenario (Figure 2).

Figure 2: Decomposition of US 10y Treasury yield*


Don’t be fooled by real yields based on breakeven rates. From this growth story one could hastily derive a considerable upside potential for nominal yields especially in view of still clearly negative real yields (nominal yield – breakeven). But this is a flawed reading. The breakeven rate (derived from TIPS ) is not pure measure of inflation expectations and is subject to substantial market distortions. The US 10y breakeven rates – untypically – trade 50bp above their fair value due to a combination of lack of liquidity, high demand, and limited supply (Fed holding around 20% of the outstanding TIPS volume). Using the fair breakeven value (liquidity-adjusted) to calculate real yields, we see they are almost come back to pre-crisis levels (which is nearly the same as the sum of the real rate expectation and the real term premium in Figure 2 above). The US growth story is thus already priced in and provides very little upside for nominal yields (Figure 3).

Figure 3: Real yields back pre-crisis when adjusted for liquidity distortions*

However, changes in the duration of US Treasuries might provide some small upward pressure on the yield curve. Markets are also repricing the declining dampening stock effect of the Fed’s bond holdings on the US curve. With the upcoming quantitative tightening (QT), the share of duration-bearing securities in the private sector’s balance sheet is going to increase while short-term reserves are becoming scarcer. The additional duration supply translates into upwards pressure on yields. Currently, the QE-induced duration extraction is still dampening 10y US Treasuries by 130bp. With quantitative tightening we expect this effect to diminish by 20bps by the end of the year. However, a lower fiscal impulse than expected (e.g., if the Build-Back-Better framework does not pass) could also result in lower financing need by the US government and reduce the net supply of Treasuries, which could put downward pressure on yields and partly balance the effect from quantitative tightening.

The Fed might break the hiking cycle earlier than markets expect.  The US monetary stance has undeniably become more hawkish. Given the tightening labor market, the expanded balance sheet and political pressure to fight inflation the risk reward of not tightening has indeed become too high. Cautious tightening can avoid overshooting inflation becoming embedded in expectations. However, the Fed also knows that tightening will not fight supply-side constraint-driven inflation. From this side, the pressure is going to ease over the year as we expect the inflationary pressure to abate. Our inflation tracker is already pointing at peak in Q1 2022 (Figure 4).

Figure 4: Inflation in the U.S. may peak in Q1 2022*

Sources: Refinitiv, Allianz Research

*US Inflation Tracker: equally weighted and normalized composite measure comprising 15 sub-segments (underlying trends (modified/trimmed measures), forecasts, market-based inflation measures, expected inflation implied by term structure models, monetary aggregates, consumer and producer price components, labor market indicators, commodity prices, corporate margin & profitability, and proxies for price effect from supply chain disruptions). Official measures: equally weighted and normalized composite measure comprising headline and core inflation reported by national authorities.

The normalization of the liquidity premium in the TIPS market, which should bring down breakeven rates, should also help to reduce the risk of de-anchoring inflation expectations. Instead of CPI and FOMC minutes, the focus of fixed income investors should lie on economic activity and monetary and financial conditions (MFC).

Figure 5: US Financial Conditions and ISM Manufacturing Index
Our baseline is still a cycle with three rate hikes this year and eight in total. This remains a very moderate normalization path by historical standards. On average, nominal tightening in the hiking cycles of the last 50 years reached 3.9pp and real tightening 2.8pp. For the upcoming cycle, we see tightening at only 2.0pp in nominal terms and 2.1pp in real terms. But if the growth momentum slows down further (e.g. ISM falling below 50, persistently weak retail sales as in December etc.) and if we see a noticeable tightening of MFC, then the Fed could break the tightening cycle after only two or three hikes. From today’s standpoint, 3-4 hikes would then have to be priced out. The market would switch from bear-flattening to bull-steepening (Figure 5).

Financial markets signal a shortened cycle. 
The 2y10y steepness of the US curve is already very flat compared to earlier lift-off phases (75 bps vs an average of 120bps in the 2 months prior to lift-off). Looking at the swap forward curve, we can already see inversion patterns that previously only appeared in late phases of hiking cycles, usually 2 to 3 hikes before the peak (Figure 6). These signals are somewhat at odds with the aggressive pricing on the money market, where currently 6-7 hikes are priced for the next two years.
Figure 6: Forwards at inversion point even before the hiking cycle started

Equity market developments seem to confirm a shortened cycle. Over the last 50 years, 85% of the Fed rate hikes have taken place at a moment when the S&P 500 has experienced a 12-months drawdown of less than 10%. Today we are already at -8.3%. So, we are approaching an area where rate hikes are very rare (16% of all hikes). When they took place, it was mostly in the very late phase of the cycle (Figure 7). One can, of course, emphasize the uniqueness of this post-pandemic cycle and argue that the Fed should not care about equity markets. However, the past has shown that the suppression of risky asset volatility and preservation of the wealth effect feed into the reaction function. For us, behind the tactical noise signals are piling up that the biggest risk in the U.S. bond market might thus not come from the Fed falling behind the curve, but from many market participants positioning themselves too far ahead of the curve. Like the real economy went through a full cycle in less than 2 years, markets might go through monetary cycle without substantial hiking ever happening.

Figure 7: Fed rate hikes and S&P 500 12 Drawdown

Even in the long run US yields will remain subdued. It is difficult to imagine long-term rates reestablishing clearly above 3% on a sustained basis. We currently see the long-term (5 years ahead) nominal equilibrium interest rate in the U.S. at 2.6% of which 0.6% are attributable to the real neutral rate. This equilibrium rate could only shift substantially above 3% if we experience extreme monetary tightening or if massive government spending creates a permanent boost to potential GDP. For some, President Biden’s infrastructure plan could trigger such a GDP boost. However, to double the neutral rate relative to our baseline scenario, trend growth would have to reach around 3.5% (against currently 1.8%) without triggering a permanent surge in inflation. But the equilibrium rate could also reach 3% in a negative stagflation scenario.

Figure 8: US equilibrium rate scenarios for a 5-year horizon*

In that case, the driver would be permanently de-anchored inflation expectation (over 3%) while the neutral interest rate would decline as the growth potential is impaired. On a fundamental basis it is therefore hard to justify the regime shift narrative. It is much more likely that, behind all the current market noise, the low for longer regime will prevail (Figures 8 and 9)

Figure 9: Scenarios for US real neutral rate (r*) for a 5-year horizon


4 Major Trends Propelling the Growth of Automated Infrastructure Management Solutions Market by 2027

There has been a significant rise in the number of data centers globally over the past few years, driven by the increasing storage and computation requirements to serve applications based on machine learning and AI. This has strongly influenced the adoption of automated infrastructure management solutions and systems across data centers worldwide. The demand for these systems is being further stimulated by the rising penetration of connected consumer electronic devices which is opening new growth opportunities for the automated infrastructure management solutions market.

The market growth is also being accelerated by the growing proclivity towards renewable power generation. AIM solutions help in enhancing the grid efficiency, reliability, safety, and resilience for energy and utilities. They also aid in increasing decarbonization through cleaner electrification and real-time climate data management.

As per the recent report by Global Market Insights, Inc., the automated infrastructure management solutions market is projected to surpass USD 4 billion by 2027, considering the following trends:

New product launches by major companies

Various major companies active in AIM solutions industry are focusing on the development of innovative infrastructure management tools to effectively meet consumer demands and consolidate their position in the market. Quoting an instance, in 2021, RiT Tech, a leading provider of converged IT infrastructure management and connectivity solutions, launched automated infrastructure management tools, designed to bring real-time visibility, control, and monitoring of the entire network physical-layer components.

Burgeoning demand for device discovery solutions

Device discovery solutions find extensive application in various industries owing to their ability to manage the connected environments in real-time. These solutions help in the automatic correlation of performance in all infrastructure tiers for isolating the root cause of problems by detecting the exact device of concern. In addition, they also deliver information regarding the connected devices and their activities in IT infrastructure. Besides, they also help in storing and collecting information about cabling connectivity as well as its connection with other sources through Application Program Interfaces which is fueling the adoption of device discovery solutions further.

Heightened adoption in IT and telecom sector

Growing investments in 5G infrastructure with the shifting consumer preferences for next-generation technologies and smartphones is one of the major reasons driving the adoption of AIM solutions in IT and telecom sector. These solutions provide real-time insight into illegal IT activities along with the automatic recording of all modifications. This in turn helps in improving the asset utilization, reducing the troubleshooting time, offering faster service turn-up, and better network security. In addition, it offers a GIS service that facilitates visualization of locations, engineering architecture, and connections in the physical infrastructure levels as well as the service trail layers and the logical networks.

Expansion of data centers in North America

The continuous growth in the data center infrastructure in North America is largely contributing to the expansion of the regional AIM solutions industry. This can be ascribed to the factors such as increased usage of cloud computing, rise in IoT, and expansion of mobile broadband in the region. In addition, the shifting of numerous data centers and various companies from hardware to software-based services in the U.S. is driving the data center installations. Besides, the increasing penetration of automated connected devices is further impelling the adoption of data center management solutions, complementing the business expansion.

Briefly, the automated infrastructure management solutions industry is growing with the adoption of advanced technologies like AI, IoT, and machine learning, coupled with the expansion of data center infrastructure globally.

Source: Global Market Insights Inc.




Manufacturing is a critical component of the U.S. economy.

In 2020, the sector directly contributed $2.2 trillion to the nation’s income, accounting for 10.8% of total GDP. If you include direct and indirect value-added activities (such as purchases from other industries), this rises to 24%.

Manufacturing is an equally critical employer. Indeed, current population survey statistics show that there are 15.7 million employees working in U.S. manufacturing roles–10% of the country’s entire working population. 

It is no surprise, therefore, that the industry is at the cutting edge of innovation. 

Within this active and pioneering landscape, many firms are embracing Industry 4.0 with open arms, recognizing it as the future of the sector and vital to unlocking competitive advantages. 

Resultantly, it is an industry attracting significant private investment, and states are jostling in an attempt to get their slice of the pie, doing so by providing a range of different incentives, from tax credits to grants.

It’s easy to see the logic from the state perspective when looking at the economic spillover. Indeed, one paper estimates that the average automobile manufacturer receiving state subsidies promises to create 2,700 jobs and receives $290 million–more than $100,000 per role created.

Here, we’ll take a look at some of the U.S. states offering the most attractive incentives for manufacturers. 


As the most populated state in the country, it is of little surprise that California is a hotbed of manufacturing innovation, having successfully drawn in large numbers of manufacturers through a series of initiatives.

Notably, California provides a dedicated incentive in the form of the Manufacturing and Research & Development Equipment Exemption. Available to all manufacturers and businesses engaged in research and development activities relating to biotechnology, physical sciences, engineering and life sciences, a partial exemption in state sales and use tax is provided, capped at $200 million a year.

The state also promotes green manufacturing practices through its CalRecycle programs that include grants and low interest loans for the development of critical infrastructure. Examples include manufacturing projects that proactively reduce landfill waste and minimize carbon footprints, with $11 million in grants having been provided in FY 2018-19.

This is alongside a range of general incentives that manufacturing firms can tap into. All qualifying companies may receive corporate tax income credits up to 24% of their basic research expenses, and 15% on R&D expenses. 

Equally, the state offers discounted electricity rates to companies bringing new jobs and loads of at least 200kW annually. Typically, these discounts are between 12-30%, spanning a five-year period. 


New York also offers a variety of dedicated incentives for manufacturers. 

Through the Manufacturer’s Real Property Tax Credit initiative, qualifying firms can apply for a credit equal to 20% of the real property taxes paid on their business properties in each given tax year. Further, the state’s Investment Tax Credit (ITC) scheme provides 5% credit to those companies that placed qualified property into service during any given tax year, with new companies able to receive this as a refund instead of carrying it forward. 

Beyond property, New York also runs the Excelsior jobs program that provides five refundable tax credits for up to 10 years. This includes a credit of up to 6.85% of wages per net new job and a credit valued at 2% of qualified investments, among others, with qualified green projects receiving even more favorable percentages. 

There are also special benefits for those operating within the food and beverage industry specifically, namely through the Alcoholic Beverage Production Credit. 

Those companies producing 60,000,000 or fewer gallons of beer or cider, 20,000,000 or fewer gallons of wine, or 800,000 or fewer gallons of liquor within a tax year may be eligible to receive a credit equal to 14 cents per gallon for the first 500,000 gallons produced in New York state, with 4.5 cents per gallon credits offered thereafter.


As the second-largest state, Texas has a buoyant manufacturing sector with plenty of commercial space available and a series of attractive incentives for businesses.

As the largest deal-closing fund of its kind, the Texas Enterprise Fund is one that particularly stands out, providing cash grants to companies considering new projects in an attempt to win out over other competing states. Indeed, it is critical in helping the state to secure new projects that stand to offer significant capital investment, employment opportunities and other benefits.

The Industrial Revenue Bonds scheme also benefits manufacturing firms more specifically, used to provide tax-exempt financing (of up to $10 million for $20 million-plus projects) for land and property to manufacturing and industrial developments. 

This is a central draw alongside Chapter 313 within the Texas Economic Development Act. Specifically, Chapter 313 was instated to incentivize leaders of capital-intensive investment projects, such as large-scale manufacturing and research and development facilities, to select the state. Meanwhile, like California, Texas offers tax exemptions on utilities to manufacturing companies that manufacture, process, or fabricate tangible property.


Those companies operating in the advanced manufacturing sectors are deemed to be eligible for two different programs run in the state of Florida.

The first of these is the Capital Investment Tax Credit (CITC) that aims to bolster the state’s capital-intensive sectors. Here, an annual corporation tax credit is provided for 20 years for qualifying projects that invest $25 million and create at least 100 jobs.

The second is the High Impact Performance Incentive (HIPI) that instead provides grants to businesses operating in high-impact sectors, such as transportation equipment manufacturing. Eligible companies must make a cumulative investment of $50 million, with this money being used to create a minimum of 25 full time jobs in the region over three years.

Beyond these two flagship initiatives, the state also provides a series of other special incentives. The Rural Community Development Revolving Loan Fund and Rural Infrastructure Fund has been deployed to “meet the special needs that businesses encounter in rural counties,” for example. And the Brownfield Redevelopment Bonus Refund is used to “encourage Brownfield redevelopment and job creation,” with applicants receiving tax refunds of up to $2,500 for each job that they create.


Indiana is often touted as the beating heart of U.S. manufacturing. According to 2020 figures, the industry accounted for more than a quarter (27.84%) of the state’s total output, employing 17.07% of its working population, with more than 8,500 manufacturing firms operating in the Hoosier State.

Indeed, Indiana lays claim to the highest concentration of manufacturing jobs in the country, with 80% of the world’s RVs manufactured in the state. 

To sustain such a position, Indiana offers a variety of tax incentives and economic development programs to stimulate the creation of jobs and investment locally.

Its Skills Enhancement Fund supports the training and upskilling required to make capital investment viable for businesses, typically reimbursing half of all eligible training costs over a two-year period. 

Further, Indiana offers two tax incentives targeted at encouraging investments in research and development. These initiatives stand alongside its Patent Income Tax Exemption, Redevelopment Tax Credit, Venture Capital Investment Tax Credit, Headquarters Relocation Tax Credit, Hoosier Business Investment Tax Credit and Community Revitalization Enhance District Tax Credit. 


Illinois offers a variety of competitive incentives, from tax credits to grant and loan programs, in the aim of attracting businesses of all kinds, including manufacturers.

The latter sector benefits specifically from the Manufacturing Machinery & Equipment Sales Tax Exemption that provides a 6.25% state tax exemption on consumables purchases made in relation to the manufacturing process.

Economic Development for a Growing Economy is a general initiative, acting as one of the state’s primary incentivization programs. Those firms investing $5 million and the creating 25-plus jobs can benefit from 10-year tax credits on their expanded payroll. 

Similarly, the High Impact Business scheme is available, providing a sales tax exemption on manufacturing equipment purchases among other activities to those businesses making $12 million investments to create 500 full-time jobs, or $30 million to ensure the retention of 1,500 full-time jobs.

Illinois’ other primary incentive programs include its Tax Increment Financing policy and New Markets Tax Credits, among others, while the state also operates dedicated enterprise zones and the U.S. Empowerment Zone Program, each offering a cohort of benefits to companies.


The Economic Development Partnership of North Carolina offers a range of incentives spanning discretionary grants, building demolition and reuse, public infrastructure, transportation, workforce training and development and tax exemptions, among other programs.

Within this broad net, manufacturers can benefit directly from several dedicated tax exemptions. 

The state offers a Machinery and Equipment, Sales and Use Tax Exemption for general manufacturing machinery, with an additional Raw Materials, Sales and Use Tax Exemption ensuring that component parts or ingredients of manufactured products are also exempt (this including those packaging items for wholesale and retail products delivered to end customers).

A third sales and use tax exemption can be found on electricity, fuel and natural gas when they are used in manufacturing operations, while the state’s Inventory, Property Tax Exclusion ensures that North Carolina and its local governments do not levy a property tax on inventories.


In Massachusetts, manufacturers are eligible for a variety of tax benefits. Be it exemptions on local personal property taxation, sales/use tax exemptions on properties purchased for manufacturing, or a 3% investment tax credit for newly purchased machinery and equipment, there are several reasons why the Bay State’s manufacturing industry is thriving. 

Indeed, it is estimated that manufacturers account for 9.39% of the total output in the state that is home to 243,000 manufacturing employees (as of 2019).

Pharma and medicine is the largest sub-sector, driven by the Massachusetts Life Sciences Initiative that offers such companies a 10% credit on depreciable property as well as a special sales and construction sales tax exemptions. Equally, the Life Science Company Jobs Credit provides corporate income tax credits to those firms creating a minimum of 50 new employment opportunities.

Beyond life sciences, a greater variety of manufacturers may also tap into a two-category R&D tax credit, the first (10%) relating to qualified expenses, and the second (15%) relating to basic research payments.

The state also offers critical grants via two key programs–the Massachusetts Transition and Growth Program, as well as the Regional Economic Development Organization Grant Program.


The city of Mason, Ohio, lists advanced manufacturing as one of its targeted business sectors, providing a variety of incentives via REDI Cincinnati, CincyTech, TechOhio, VentureOhio and JobsOhio.

The latter of these agencies is responsible for the JobsOhio Economic Development Grant for projects requiring significant capital investment in the areas of manufacturing, R&D corporate headquarters, distribution and advanced technology.

JobsOhio also offers a Research & Development Center Grant to organizations with $10 million in annual turnover and a five-year operating history, as well as its Revitalization Program that offers funding of up to $1 million to those looking to redevelop the state’s underutilized sites.

Tax credits and exemptions are equally in abundance, some of the most notable including the Research & Development Investment Tax Credit, Job Creation Tax Credit and Sales Tax Exemption on machinery and equipment used in manufacturing processes.


Recent incentives offered by the state of saw Coca-Cola Bottling Company UNITED commit to a $42 million investment that will be used to expand its bottling facility in Baton Rouge–a project that will not only safeguard 550 jobs, but equally create an additional 15 with an average salary of $43,000.

The state is providing the firm with a competitive package that includes a $300,000 modernization grant, as well as support from LED FastStart–Louisiana’s workforce development program that delivers customized employee recruitment, screening, training development and training delivery at no cost. Further, the firm is also expected to utilize the state’s Quality Jobs Rebate and Industrial Tax Exemption Program.

The former offers up to a 6% rebate on annual payroll expenses for up to 10 years as well as a state sales/use tax rebate on capital expenses or 1.5% project facility expense rebate for qualifying expenses.

The latter, meanwhile, offers an attractive tax incentive in the form of an 80% property tax abatement for an initial term of five years for manufacturers who make a commitment to jobs and payroll in the state, with option to renew for an additional five.