 Good afternoon and welcome. I'm Rebecca Marquez, Business Intelligence Coordinator with PMMI. Today we're going to hear from Taylor St. Germain, Research and Consulting Economist with ITR Economics. Taylor will be covering the findings of PMMI's fourth quarter, 2018 Quarterly Economic Outlook Report. Taylor is an economist from ITR Economics. He provides economic consulting services with a great deal of insight and action-oriented advice for small businesses, trade associations, and Fortune 500 companies. Taylor has also brought in-depth insights of industry trends to the ITR Economics team with his willingness to go above and beyond in his daily research for our clients. Taylor's attention to detail, ability to understand the client's specific needs, and organizational skills create an enjoyable partnership with each of his clients. Today Taylor will interpret the information included in the Quarterly Outlook and provide insight on how today's economy may be affecting your packaging and processing operations. If you have any questions that you would like to ask Taylor, please type your question in the chat box that is located in the bottom right-hand corner of the screen. At the end of the presentation, which will last approximately 40 minutes, he will answer your questions. At this point, I would like to hand the webinar over to Taylor with ITR Economics. Thank you very much, Rebecca, and thank you all for joining me here today. If you don't recognize the name, I did the webinar back in July with all of you. So for those who are returning, welcome back. For those who don't know me, I am an analyst and speaker at ITR Economics. I'm sure many of you have seen Brian and Alan Bolio out on the road. I also travel and do similar presentations. So you'll see the same style here. My goal for today is really to talk about 2019 and what's coming. I know it's planning season for all of you, and we're looking and finalizing those budgets and forecasts for 2019, so I want to give you an update on what's coming, both in the industrial economy and for the industries that are specific to PMMI here. So that's my plan for today. I do want you to notice that I titled my presentation today, Navigating the Crest. I'm sure that's a hint to all of you that we are approaching a peak in the overall economy here in the U.S. We've seen the GDP data, and we've reached a peak in GDP. We expect the industrial production peak to be coming as well. So we will be on the back side of the business cycle in 2019. And that's certainly what I'll cover today. I'll show you what our forecasts are for 2019 and 2020. I'll give you plenty of information on why we believe our forecasts are correct, and I'll show you some of the indicators that we're looking at here as well. And then I'll make sure and cover some of the major topics out there. Like, I'll give you an update on tariffs, I'll give you an update on trade, and then a lot of the consumer-related pricing pressures out there. So I will definitely try to make sure to give you the holistic point of view. And then towards the end here, we'll talk about the market specific to PMMI that were in the most recent report that we delivered to all of you. So again, like Rebecca said, please do come up with any questions you have. I'd love to answer them at the end. The more questions, the better. So first, I'd like to start off the presentation by giving you the general economic outlook. Now, for those of you who were with me last time, we really only talked about industrial production because 75% of industrial production is manufacturing. So it is most specific to PMMI. But today I did want to give you an update on GDP because we've heard a lot about GDP in the news lately. So I wanted to share this chart with you. So this is US gross domestic product on your screen. Please do note that we are talking about real GDP here. So this isn't the 4.2 and 3.5 numbers you've heard for the second and third quarter here. This is real GDP, not nominal like we hear in the news. The difference being we take into consideration inflation with GDP. The reason being we live in the real world. We're all impacted by inflation in our businesses and even in our personal lives. So we like to look at real gross domestic product. What you're looking at here, the chart on the left is GDP in actual dollars. So you're looking at an $18.5 trillion economy currently. The teal bars here moving forward represent our forecast expectations for the dollar value of GDP. Now the chart on the right here is the growth rate. So we're looking at the rate of change for GDP. I want to focus on this chart here on the right for the majority of this next 60 seconds here of this conversation. Because you can see that we are approaching a peak. Like I said on my title slide here, we are going to be navigating this crest of GDP. We will be on the backside of the business cycle in 2019 as you can see here. We are expecting a very mild slowdown as we approach that late 2019 period. But you can see it's not crossing below the zero line. It's actually skating right along that zero line and heading back into the positive territory for 2020 and into 2021. So no recession in GDP but a very obvious slowdown that we will feel in our businesses. Now the reason I like to share this GDP expectation is because you just heard me say no recession in GDP. But if you've been following IGR, we've been calling for this mild recession. So where is this mild recession actually coming from? It's from the B to B side and that's in industrial production. So the difference between GDP and industrial production, the two series is really the size. Of course GDP, this massive series, $18.5 trillion series, it's a much larger series than US industrial production. Now US industrial production is simply 75% manufacturing and then the remaining 25% is made up of mining, oil and gas and then utilities as well there. So that's why GDP, those growth rates, don't move as high or as low as what we see in industrial production. So our expectation for industrial production is that we will be approaching a peak very similar to GDP illustrated by this rate of change chart. But in this late 19, early 20 period you can see we are falling below that zero line. And that's consistent with what I reported to all of you in July. Now I wanted to make sure that you understand we have had a mild revision to this forecast since I talked to you in July. That revision is nothing to do with the level of the growth rates. It has to do with the timing. So the tax cuts in the United States here gave us a temporary boost to the economy. So that's stimulated in the economy and extended the current rising trend that we have here in the United States. So we are now calling for the peak in the US economy to occur in the first half of 19, which pushed that subsequent low into the first half of 20. So all it was was a one quarter extension up top and at the bottom. So instead of the previous late 2018 peak we're now calling for an early 2019 peak and instead of the late 2019 low we're now calling for an early 20 low. So again you can see that recession expectation has remained unchanged. It's just that expectation has been pushed out one quarter. So that's the difference between our industrial production now and from the last time I talked to you. Now you all heard me say that we're going to see a recession in GDP but not in industrial production. And I wanted to show you a chart comparing the two of them so you better understood why we're making this claim. So the blue line that you're looking at here is industrial production. The orange line here is GDP. Now you can see how much lower industrial production swings at these low points than what we see in GDP which is that orange line. Again the reason being GDP is such a massive series it takes much more to move those growth rates as we're looking at all goods and services here in the United States. So we've seen times throughout history like 15 and 16 where GDP is just skated by that zero line and industrial production has fallen below the year ago level. We've seen that back in the early 2000 time period too similar trend going on there. And that's why we have this expectation moving forward. Obvious slowdown in GDP, very, very mild recession in U.S. industrial production. But as I've said in the past do not treat 2019 in this expectation in late 19 and early 20 as a recession like 0809 it's nothing like that. What we're suggesting is we're going to see about one and a half percent contraction in 2019 in early 20 compared to 15 percent contraction back in this 0809 period. So it's actually the most mild recession in 100 years that we're calling for in industrial production. So many of the markets that you're involved in will actually avoid this recession and then we'll have some that will fall below and I'll be sure to point those out later in the presentation. But from a holistic planning view do plan for a slowdown in industrial production and in GDP throughout 2019 and for that first half of 2020. You should expect activity to be lower than what we've seen throughout 2017 and 2018. So that is something you can bank on in your business. By the second half of 2020 and into 2021 we see that positivity returning to the economy. So what we're telling our clients currently is use this 19 period the slowdown to revamp your technology. Get the right people in place for this rising trend that's coming in 2020 and 2021 because we do expect those to be positive years for the U.S. economy. So it's really about weathering this storm in 19. Treating 19 and 20 is more of a speed hump before we see that positivity coming back. So that's the message from the high level point of view to plan for 2019 to be slower than what we saw in 2018. Now every time I have this conversation with clients it seems to come up with what's a recession proof industry as they would say. So here's my recession proof industry for you all today. It's retail sales of beer, wine and liquor. When the U.S. we drink when times are good and times are bad. So if you can at all increase your footprint in that food and beverage industry especially related to alcohol that's an area of opportunity in 2019 is we don't expect that to fall below the year ago level. We also don't expect food production to fall below the year ago level at this time which I certainly know is an important industry for PMMI. So those are two industries certainly to look for in 2019 that we expect to remain above the year ago level. So that's the holistic view. I want to give you an update on tax reform and our leading indicators. So a couple of these slides I've updated since the July webinar but they look very similar to slides that you saw. So the first one here is just basically demonstrating what tax cuts have done historically. And again I did show this one last time. And basically what we see here, the blue line is the corporate tax rate and even though we've seen that blue line consistently falling over time we haven't seen this orange line at the bottom increase. It's remained flat. And that orange line is business investment as a percent of GDP. So with the current administration when they put these tax cuts in place suggested that businesses will invest in the overall economy with that freed up money investing in GDP. Well we haven't seen that happen historically. Now we're certainly not speculating moving forward. We're not forecasting that this will continue not to happen. I'm just showing you what we've seen historically and that tax cuts have not spurred investment in overall GDP historically represented by this chart. And what we're seeing the money with the current tax cuts going towards is stock buybacks first and foremost. They're up well over 40% from this time last year. So a lot of these major corporations are using this freed up tax money to buy their stocks back and really reward those shareholders out there. So that's the first piece. And then cleaning up the balance sheet, getting out of debt is another important thing that we've seen happening with these major corporations here in the U.S. with that tax money. Now who is taking that money, that tax money and investing it back in GDP? It's the small businesses and that's what this Atlanta Fed share is saying. We're still seeing this whole truth from the last time that we talked to you. Unfortunately these small businesses don't make up enough to really move that needle in terms of business investment. So the small businesses, we're certainly seeing investing in capex and taking advantage of some of these provisions and tax cuts. Now you might be asking yourself, well Taylor, you're saying that these tax cuts aren't spurring business investment, but you said you upward revised your forecast due to the tax cuts. So what's the story here? Hopefully this next slide here will bring it together for all of you. What we do see from these tax cuts historically is a temporary boost. And that's what we've updated our forecast to account for. Now again, by that chart I just showed you a couple of slides ago, we don't see the overall needle move in terms of business investment as a percent of GDP, but we do get this temporary boost in the economy from taxes that we've seen historically. So this blue line is the corporate tax rate. The orange line is the GDP rate of change. We were looking at the first chart. And you can see each time this marginal tax rate declines, this blue line dips down, we get a spike in GDP. But that's a short-lived spike and it's part of a longer decelerating trend. And we can see that after each one of these drops in the blue line. So what we've done is we've received that data since we last talked in July that was affected by the tax cuts. And we did get that temporary boost that we've seen here historically from the tax cuts. But as you can see with our expectation, it's part of a longer decelerating trend, i.e. 2019 and 2020 being a slowing growth trend. So we have accounted for tax cuts in our forecast. That's getting us this extra quarter of rise into 2019, but it's part of a longer decelerating trend, which is what we have factored in here. I want to give you more information about why our forecast is the way it is for industrial production. I showed you this slide last time in July for all of you that were with me then, but it is updated and really the story with our leading indicators is that they're crossing below the zero line now. That's not what we were seeing when we all chatted in July. So what you can see here, the dark blue line in the background represented by these markers is US industrial production. You can see our forecast for IP included here. And the four indicators you're looking at on the chart are the G7 indicator, the Purchasing Manager's Index, the Wilshire Market Cap, and the JP Morgan indicator. Now, I'll go through each one of these. The G7 indicator, you're looking at a global indicator that represents top economies here in the US. It's in that pink line. It leads the US economy by about eight months, and you can see it's already crossing below the zero line. So that tells us the global economies are slowing down and actually already are passing through zero. It's historically been a strong indicator for US industrial production, and that's why we have this forecast here heading back towards that zero line. So that's the first piece of evidence we have here. The second is this green line, which is the Purchasing Manager's Index. Once again, since we've talked last, it has crossed below this zero line, so it's now in a recessionary trend. What that Purchasing Manager's Index measures is manufacturing activity here in the United States. So we call it the feeling survey. It's a survey of how manufacturers in the US are feeling, and you can see that that rate of change has crossed below zero. It's historically been a great indicator of directional movement of the overall economy, which tells us our forecast should hold true for this slowdown to 19 into 2020. So that's a manufacturing indicator, which again, US industrial production, 75% manufacturing, an incredibly important leading indicator to look at for PMI, and it's already crossing below zero. The blue line here that you're looking at, you can see it tick up in the most recent data. This would be the positive risk to our forecast, the risk being that our forecast could see an extra quarter of rise. And what does that indicator represent? It represents the stock market here in the United States. So you're looking at publicly traded companies captured by that Wilshire market cap, still doing relatively well, but we do expect as we get this fourth quarter data for that trend to head back in the downward direction for those of you who keep up on the day-to-day trading in the stock market, we have certainly seen some sell-offs and minor corrections in the market. So we do expect that trend to be heading back downward in support of our forecast as we receive fourth quarter data. And then finally, the last indicator here is the JP Morgan Global Manufacturing Indicator. That's in dark purple here. And once again, a strong leading indicator for the overall economy. It's a global indicator that's already crossing below zero. So a lot of support for our forecast in the indicators out there that suggest this 19 will be a slowdown with that mild recession coming in the first half of 20 there. So that's the US-centric indicators. I did want to give you an update on where the global indicators are looking. And again, since the last time we've talked, each one of these indicators on the screen has crossed below that zero line. So the global economy is certainly slowing down. I have that JP Morgan Manufacturing PMI charted again so you can see it better here. And then we have the Eurozone PMI and the European Union PMI. And you can see all of them in that negative territory. So the global economy is slowing down and it's slowing down much faster than the US economy is, which brings me into our next subject, which is tariffs and trade. One of our concerns out there as it relates to these tariffs is that you can see that the US economy is still doing relatively well, but all of the global indicators are crossing below that zero line. And then we put these tariffs in place on these other countries. That could have a negative impact on growth outside of the US because of those economies already in that slowing growth trend. So that's one of the concerns as it relates to the global snapshot of tariffs. We're seeing all those indicators below zero. And that tells us that if these countries are continuously negatively affected by these tariffs, then we could see even further downside pressure on the global economy. So something to take into consideration, we try to keep up with the tariff conversation and we update our blogs and our posts on LinkedIn. So stay current with ITR and we'll keep you updated on the global snapshot as it relates to tariffs. But I just wanted to paint the point of view of where we're at in terms of this tariff and trade situation. So on your screen here is the trade deficit. Now we're an apolitical firm here at ITR. We don't get into the politics and we don't choose sides. I'm just showing you where we're currently at. And currently we have a pretty massive trade deficit of about $583.3 billion on a 12-month moving total. So a pretty big margin that you're looking at there. Now again, some people from their political points of view believe a trade deficit is good. Some people believe it's not. I'll leave that up to you. I just wanted to show you where we're currently trending here. So that's the current trade deficit. This next chart that you're looking at, it's a new chart from the last time we talked that we put together. And it's just to paint the picture of this tariff situation here in the United States versus the rest of the world. So on the left here you're looking at tariffs that the U.S. has put in place on countries around the world. In the right column here you're looking at retaliatory tariffs by other countries around the globe against the United States. You can see clearly here that the picture is a little distorted to the U.S. side and is a safe claim to make here. Basically the U.S. is putting many more tariffs on other countries than we're seeing retaliate. So please do ignore these top two boxes for the U.S. here. Those are just proposed at this time. So those are proposed auto tariffs and further tariffs on the Chinese. They are not in place at this time. But if President Trump does want to go with the full kitchen sink so to speak and put these tariffs in place, you're looking at a very massive dollar value that he can still target with these tariffs. What's actually in place currently is this bottom few boxes here. The most recent one being this $200 billion that was put in place as a 10% tariff on September 24th. Now if we don't get positive negotiations coming on the part of President Trump and the Chinese, here in the next few months that tariff will bump up to 25% by January 1 of 2019. So of course only time will tell here and we'll see how it shapes up. But you can see the U.S. has put much more tariffs in place, many more tariffs in place on countries around the globe than we've seen come back at the U.S. here. So that's the current tariff picture. Again, does China lose? Of course in the U.S. we suggest they're stealing our intellectual property. China is responding with tariffs. We're playing this tip-for-tact game currently. China will still lose. For those of you who weren't with me last time, the reason China will still lose is because just simply facts here, exports from the U.S. to China are only 0.7% of U.S. GDP. Exports from China to the U.S. are almost 4% of China's GDP. So just because of those proportions, will the U.S. win a trade war against China? Yes, we certainly will. Will the U.S. win a trade war against any country around the globe? You certainly bet we will. But it's at what cost comes with these tariffs in this trade dispute that we have going on here? And that's highlighted on the bottom of your screen here. We're seeing inflation rise here in the United States. Our forecast for inflation for 19 and 20 is that it will continue to rise. It'll rise at accelerating paces at some points and at slowing paces at some other points. So keep current again with ITR, but do plan in your 19 budget for inflation to rise. And that will impact, of course, as we know, the consumer's purchasing power, which is something you've taken into consideration in those 19 budgets. But really, the other concerns out there too are just these downstream industries, industries like PMMI. We import a lot of raw materials from China in the United States and use them in manufacturing here in the U.S. We're seeing a sharp increase in prices, especially when we look at steel. So when we see raw materials increase here in the United States, we have two options. We pass along those price increases to customers and consumers, or we eat those price increases and take the profit loss. Most companies have been passing those price increases to long-to-customers and the consumer. So we could see that affect the consumer as we move into 2019 and put the consumer in some of these downstream industries in a worse position. So that's one of our concerns as it relates to the tariffs. The other is just an example to use is a nail company. I'm not sure if any of you have read the article, but a company manufacturing nails out in the Midwest, they saw their raw materials increase. They had to go out of business and 600 people were laid off. And that's what we're seeing as a reciprocal pressure from these tariffs, the cost of those materials increasing, and it's whether businesses can handle that increase and can pass along those prices. And if they aren't successful, we are seeing some companies go out of business and seeing job loss. So those are our concerns as it relates to the tariffs. It's really inflation and how these downstream industries will be impacted due to rising input costs. There are certainly winners of these tariffs though. We're seeing it in the steel industry. We're seeing it in wood production. So there are industries out there that are benefiting from these tariffs. So it's really what side of the 8-ball, so to speak, that you're on here. But there are certainly winners and losers in this tariff situation here in the U.S. Some of the losers out there are these major industries targeted by China's retaliatory tariffs. I showed this slide last time, but for those of you who weren't with me, aerospace was one of the main targets of China's retaliatory tariffs. You can see how many states are impacted by that aerospace tariff. You're looking at top goods exported by state here in the U.S. and many states here. Their top export is aerospace, which was China's number one target. Number two target, of course, we know soybeans. Now I'll make a personal claim here. Don't hold ITR to this. Hold this to me. I think soybeans was a bit of a shot at President Trump on the part of the Chinese. President Trump, 8 out of the 10 top soybean exporting states here in the U.S. were read during the 2016 election. So that soybean tariff is affecting Trump's voter base, in particular there, which is why I, in my personal humble opinion, think that China really covered both bases here and that was find a major industry in the U.S. to target with aerospace and then target President Trump's voter base and they did that with soybeans. So that's my expectation there. The last slide I want to show you is new. One of our speakers at ITR put this together. His name is Connor Locar, interesting chart that he threw together here. Basically these are the companies you're seeing on your screen are all companies that will be raising their prices only due to tariffs. So no other outside factors, just tariffs are causing these companies here to raise their prices. Interesting quote from the CEO of Miller-Course. You can't just go to the shareholders and say you're going to be less profitable. It just doesn't work that way. And we certainly know that for the publicly traded companies out there. So what he's highlighting is that they will be increasing prices and they will be passing those along down the line. So we're already seeing that in input costs and I'll show you the commodity picture shortly. But something to take into consideration, look at raising those prices, especially in late 18 before this economy heads downward. We are still telling our clients that raising prices is important at this point in time. So as you're putting that 2019 budget together, do revisit that pricing strategy. Again, it'll be much easier to increase prices and pass those along to customers when the economy is doing well than waiting until the second half of 2019 when we run that obvious downturn. So please do make sure that you take that into consideration. I want to transition to talking about people here. People, it's still an important subject out there. When I ask clients what are the three biggest pain points, employment is still high on that list. So I wanted to show you where we're currently trending in terms of employment, show you a few national charts to take into consideration again as you're planning for that 2019 season coming here. The first one, similar to what you saw from me in July, it's a tight labor market out there and that's what all these statistics on this chart are representing. Private sector employment is in phase B accelerating growth. Job openings are in an accelerating growth as well. Part-time employment is down and the quit rate is rising. A couple of those things together and that tells you it's a really tight labor market out there. We've been feeling it across all industries. So you all in the manufacturing industry are not alone. Construction has been feeling it. The technology sectors have been feeling it as well. It's a tight labor market. Retention is an issue out there and finding new people to hire has also been a challenge especially as we see a really low unemployment rate out there currently. So if you're feeling the employment pressures out there, you're not alone. Everybody really across the board is with you there. It's all about revisiting those retention strategies in 2019. How do you make your job more attractive especially to these younger millennial generations that we do see a bit of a job-hopping phenomenon currently happening? So it's how do we retain those employees moving forward? Look at some of those non-monetary benefits that appeal especially to that younger generation. I wanted to show you a couple of national charts here. Just to give you a picture. Depending on what state you're in, you might feel a little bit more hardships when it comes to employment than others. What you're looking at on this chart here is migration between states. So people already here in the United States moving to other parts of the country. Now this does not include immigration. So please do take that into consideration. People already living here in the United States moving from state to state. And where are these people moving? They're moving to these dark bluish green states. In the darker the red, the more loss we're seeing in terms of migration. So where are the hot pockets? It's in the southeast. It's in Texas. And then it's out west. It seems based off this chart, if you're already living in the U.S., most people really don't feel like living in the Midwest or the northeast anymore. So take that into consideration. Obviously that can affect activity of your business. That can affect the ability to hire. It's going to be a lot harder for those of you stationed in these dark red states than it will be for those of you in those dark green states out there. So just something to take into consideration again as we look towards that 2019 planning session. Now this chart does take immigration into consideration. And you can see that the story does change quite significantly. So areas that were read on the previous chart, like California, like some of these states up in the northeast, like New York, like Massachusetts, are faring better when you consider immigration. So the darker the green of the state that you're seeing on this chart, the higher the population growth rate. And you can see, again, even though a little bit of a different story from the chart not including immigration, the big hot pockets here in the U.S. are the southeast. You see very high percentages here. Texas is certainly a booming economy. And then we also have the west. Again, you're seeing a lot of that very dark green out there. So those are the real pockets of opportunity out there as the population numbers would suggest. Southeast, Texas, and then move west. That's really where the opportunity is in terms of the number of people. Now wages out there, of course, please take your wages into consideration. This is just looking at average wages. And you should plan for a 3.5% increase in your cost of labor over these next 12 months. Now that is different from what we saw the first half of this decade at 2%. So I make sure, Alan and Brian are President and CEO, make sure that I share this chart with all of you. You should be planning for about a 3.5% increase in your cost of labor. Now, again, like I said, this is an average. And we're excluding the very high end and the very low end at this chart to give us this smooth trend. So certain industries can be affected more than others. I have talked to some manufacturing clients that have seen entry level positions increase 20% this year. So this is an average, but to be safe, I would expect about a 3.5% increase in your cost of labor. Now I talked about the millennials. I have to touch on them a bit. I know this isn't a topic that all of us necessarily love, but we've got to deal with that millennial generation out there because they have taken over the workforce in terms of the makeup. So that 25 to 34 age range is now the largest age group in the workforce today. So those millennials out there do make up the largest part of the workforce. I'll show you what states are affected most by the millennial population. The reason I want to show you this is you might think different about retention strategies than some other states that don't have a very high millennial population. And again, California, Texas, some of those pockets that we were seeing people move to have some pretty high millennial accounts here. You can see once again that the Northeast is certainly on the bottom in terms of the millennials. And then Florida looks like it's still dominated by the baby boomers out there in the retirees. So not a big millennial population out there. But for those of you in these dark green states once again, you will have to visit those millennial retention strategies. I have just a couple studies on the chart related to those millennials because like I said, once again they are the largest part of the workforce. One study said that 66% of millennials plan to change jobs in the next five years. So that means two out of three of those workers between 25 and 35 that you're looking at at your place probably plan on leaving within the next five years. A pretty powerful statistic to look at there. The second one I'll share with you is in 2008 they pulled millennials and 75% expected to have between two and five employers in their lifetime. Only 10% thought they'd have six or more. We fast forward to 2018. Now 25% of millennials expect to have six or more jobs. So is that job hopping phenomenon out there related to the millennials? It is. It's something to take into consideration. Especially now we have these social media sites like LinkedIn and Glassdoor. I know I get an update once a week telling me seven jobs in my area that are perfect fits for me. So not getting a whole lot of help in terms of retaining employees in general, but just something to take into consideration. Again, the millennials, it's similar to what we've seen in prior generations. They've just taken longer to do certain things like get married, buy homes, but we're starting to see in the data that the millennials are getting to that more mature age, tending to stay in one spot more, buying single family homes. We're starting to see those marriage rates rise. So just something to take into consideration again as you're pointing for 2019. We don't expect the labor market to be any more favorable. We expect it to continue to tighten and continue to see good candidates out there, but it's how can you retain them from getting poached by competitors and other industries out there. So that's my millennial spiel for you. This next section before we get into the PMI specifics is just related to some pressures out there you should take into consideration. The first being interest rates. I've updated this chart since the last time we all talked in July. It looks similar, but I've included 2021 now and updated the projections for each FOMC member, which is what you're looking at on this chart. So each dot represents a Fed Open Market Committee member and their projection for interest rates with the corresponding year down here on the X axis. Basically, what you can take away is that the FOMC members and the Fed Chairman Powell do expect interest rates to rise through that 2020-2021 period. We expect to have some gradual increases. We got one in September. We're now up to 2.25%. They expect interest rates to level off in 2020-2021 at about that 3.25 to 3.5% range. So do plan for about a 1.25% increase in interest rates over these next three years that's supported by these members in the Fed. So once again, something to take into consideration in 2019 that you can expect to have about two to three interest rate increases as well. I wanted to show you how CAPEX is performing for those of you out there in the capital expenditures sector. We're seeing some positive growth in this rate of change, which is the top two lines here. You have your quarter over quarter and year over year rates of change. We're still seeing some good positivity from those rates of change and some of that is stemming from that tax law. A very positive provision that we see in our eyes in the tax law and that was that depreciation provision allowing you to deduct 100% of the purchased capital equipment. We see that as very advantageous for businesses out there and people are certainly taking advantage of that which is boosting this CAPEX trend. The bottom line is the dollar value of CAPEX and that corresponds to the right axis and you can see once again that's rising and it's actually surpassing where we were before the 0809 recession. So a lot of positivity coming from CAPEX. We do expect CAPEX to slow though. We expect it to finish 2019 down about 0.5%. So similar to the U.S. economy, very, very mild contraction but you should plan for slowing in the CAPEX trend throughout 2019 as well. So take that in consideration as you're planning as well there. Commodity prices, basically the story with commodity prices we're starting to see some year over year decline in these quarter over quarter growth rates and everything except steel. Why is that? Of course the tariff. So we are seeing exasperated price rise here from that tariff. So if steel is one of your main inputs, again please consider those price increases as we move into this 2019 period. Again it'll be easier to increase those prices this year than next. For those of you that have copper and zinc they are below the year ago level. So you can start looking at locking in some of those prices at this lower level. We do expect prices to continue to decline further here for the next couple of quarters though. So do take that into consideration here. Find the best time when those prices get nice and low to lock in those prices. The last slide here before I give you the general PMMI outlook is inflation. Again what you can take away from this slide is that inflation has been rising since 2015 both in the consumer price index and in the producer price index. So the blue line is producer inflation, the orange line is consumer inflation. Both of them are rising in our forecast through 2019 and 2020 is that we expect them to continue rising. Again we'll see accelerating pace at some points in slowing pace as well. We have an ITR trends report that'll give you more information on that. So please stay current with what we're reporting and we'll continue to update on inflation. So just to wrap up that conversation you're seeing a lot of pressures out there. Tariffs are increasing prices. You're seeing the value of cap X increasing. Steel in particular is rising and then inflation in interest rates are rising as well. A lot of pressures out there that are suggesting you increase prices please take that into consideration in these next couple of quarters. So now I want to share for the last section here before I take some of your questions is just the PMMI outlook give you an idea on the specific industries from your report. So the first one here is food and food preparation. You heard me say in the beginning we see the food industry as a very positive light even in 2019 and 2020. Again the chart on the left you're looking at the index value and you can see by our forecast here we do expect food and food preparation to continue rising. So continue this record-setting trend that we've seen throughout these years. Again somewhat flat at points through 2019 as you can see here but when we get into that 2021 time period a lot of positive growth coming we expect this trend to continue up in that direction. Looking at the rate of change like the overall economy we do have a very obvious slowdown but we don't have this rate of change falling below zero. So you should plan for slowing growth in 2019 similar to the overall economy but this indicator we do expect to avoid recession. So for those of you in the food market if you can increase your footprint in food we suggest that would be an advantageous move for you as we don't have it falling below that zero line there. So the food market again very obvious slowdown but not below zero. The beverage coffee and tea very similar so the beverage market also doing well. You can see when we look at the actual index value we do have record highs but once again we have this very obvious slowdown coming. You can see it's pretty much I sound like a broken record here with this slowdown coming in 2019 but you can see why we have that in our forecast for the overall economy because even on these individual market segments that slowdown is very apparent and we're already seeing these peaks start to occur in these indicators. So do plan for that slowing growth in beverage coffee and tea but again we have it skating by the zero line and not going into a recession period with the positivity returning in 2020. So another good industry that you'll feel the slowdown in but we don't expect contraction. Now pharmaceuticals are a bit of a different story especially when you look at the 12 month moving average. So this is the activity level the actual index value. You can see compared to where we were in 06, 0708 we expect to be much lower. So that index value was up between 110 and 115. We only expect that to be between 90 and 95. So similar to the activity levels that you saw in 17 and then in that 2020 timeframe you'll see activity somewhat similar to 15 and 16. So not an area that we're very bullish on like we would be suggesting for food and beverage which we're seeing rise to record highs. We're actually seeing very similar to some of the record lows in this market and you can see this rate of change we do have faltering below that zero line as we get towards the second half of the year. So again it's still some growth coming throughout 2018 in the first half of 2019 but not the same opportunity that we're seeing in some of the indices like food and beverage. So just take that into consideration same type of story here of personal care products which is another one of those series we forecast for PMMI. You can see the rates of change don't look too bad. We are seeing some good growth throughout 2019. So this could be an area to focus in 2019 when some of the other industries head downward because we actually have some positivity there. But again when you look at the activity levels of this 12 month moving average you can see we're only reaching levels similar to 15 and 16 not seeing that same positivity that we all loved before that recession and then in the recession prior to that recession there. So again food and beverage still the front runner is pharmaceutical and personal care in terms of packaging we're seeing as more of a downside industry here. Chemicals and products production we've already seen peak. So this rate of change has peaked and it will be heading down to the zero line and we do have about three quarters of consecutive contraction there. So a much more obvious recession in 2019 in chemical. So if you're heavily involved in the chemical segment we do expect you to feel some greater negativity but again the rest of 2018 to prepare there's a lot of positive things we can do during recessionary period like if we build the cash we can buy competitors, employees and competitors in equipment at a much lower cost. So if we're prepared for that recession it can be a good time but we do expect the recession to be much more apparent on the chemical side than some of the other indicators that have shown you previously. And finally my last slide here is so this is durable hard goods components and parts production. We do expect to see higher levels than what we've seen in 16 through 18 here. Even during that recession we expect it to be so incredibly mild that we're still at a higher level than where we are now. So take that into consideration if you have a large footprint into this market even though we will see decline in this rate of change it will actually remain above the current level that we're seeing right now. So do take that into your planning for that 2019 budget but we don't see it being certainly a steep recession even like what we saw in this prior side with chemicals. You can see that the durable hard goods and components are just going to see a slow down and skate along that zero line. So certainly industries to focus more on in 2019 again food and beverage will avoid those recessions and some of those other industries like chemicals and personal care and medical device we will see a little bit more severe of recession. So that's how I would use that information for planning into 2019. So that's what I have for you all today. Just to summarize where we're at 2018 we saw accelerating growth. We do expect this peak to occur in early 2019 and for slowing growth to characterize the majority of 2019. We expect this very, very mild recession to occur in the first half of 2020. So once again please keep current with our forecast. Speaking of that we have a trends report. It's an ITR trends report. It's a monthly subscription. The forecasts are in it and then we have a lot of major manufacturing forecasts as well. So there's a lot of good information in this. You can get a 90 day free trial. All you have to do is text TR trial to this number and you can access that report for the next quarter. Great timing especially during planning seasons to have access to all of our major forecasts for the economy and for the manufacturing sector here at ITR. So please take advantage of that. Again, that's free for 90 days. Great time to have that during planning season. So that's what I have for you today. I certainly welcome any questions you may have. I will be passing these slides along to the PM and my folks. So you guys will have this all available for you. Is there any questions that I can answer for anyone now? Taylor, thanks so much for the great reflection on the current economy and the issues at hand for the packaging and processing industry. And here is, yes, Taylor's right, we'd like to open up the session for questions. If you have any, please enter any questions you would like to have answered in the message or chat box at the bottom of your screen. Or you can press star two to unmute your phone. And we will give a few, about a minute or so, to take any questions. Okay, at this time it looks like we have no questions. Taylor, this was a really informative webinar presentation. And thank you very much for this. We do have a question that just came through. When do you expect the tariffs on steel to subside? Wow, that's a great question. And to be honest with you, if I knew the answer, I think I'd be a very rich man. I think there's a couple things to take into consideration here. And this is my personal point of view, not IGR, so please don't hold them to it. But my personal point of view is we do have President Xi and President Trump meeting here in the next month. So I'm expecting some fruitful conversation to come out of that, especially as we see the Chinese economy significantly slowing down and feeling a lot of these pressures from these tariffs. So I would expect, stay current on that talk, because I think that can have a pretty large impact, especially as these midterm elections are looming. So the next point is these midterm elections I think will have an effect on policy. But again, this is an executive order on the part of President Trump. So these midterms, we're not expecting to see anything major happen in terms of the tariff conversation at this time from these midterms. I would really say this meeting between President Trump and President Xi is the important one coming up. Again, I can't tell you specifically when I would expect those to end. I'm not sure what's on the President's mind related to that. I do know that he has now proposed the, you heard me say the whole kitchen sink in terms of tariffs earlier. He has proposed putting tariffs on the remainder of Chinese exports. So again, I can't give you a good answer, unfortunately, because I don't know what the President's thinking, but I would pay attention to that conversation between him and President Xi. And I would also pay attention to see if President Trump will be putting further tariffs in place. But that, unfortunately, is the best answer I can give you. Thanks for that, Taylor. Do we have any further questions before we conclude? I'd be happy to answer any questions if you'd like to email me, reach out to me personally. I'd be happy to do that. So please don't hesitate to call ITR. We have a bunch of economists that would be happy to answer any questions you may have. So don't hesitate if something pops up after today. As an alternative to that, if anyone has any questions, you can feel free to reach out to me or Paula Feldman here at PMMI. We would be more than happy to pass those questions on to ITR on your behalf. And it looks like we don't have any more questions. Thanks again, Taylor, on behalf of PMI. Thank you, everyone, for participating today. As a final note, you will receive an email to complete an evaluation on today's webinar. Please complete the evaluation as soon as possible, and let us know how we can improve this webinar. Other than that, this webinar will be posted by tomorrow. If you missed any part of it, you'll be able to access it on PMMI.org. Thank you very much. Have a great day, everyone. Thank you all. I appreciate it.