By Alex Chausovsky and Steve Guglielmo
Alex Chausovsky gave a presentation at the 2025 GAWDA Annual Convention in Tampa. During that presentation, he touched on a variety of economic and geopolitical topics that will impact GAWDA members in 2026 and beyond. We were lucky enough to have Alex join GAWDA TV for the February 1, 2026 episode to discuss the macro-economic outlook for the year and how GAWDA members can get ahead. Thank you so much to Alex for taking the time to speak with us.
GAWDA TV – All right, we are lucky enough to be joined once again today by Alex Chausovsky. He is the president and CEO of 3DM Consulting. Alex, thank you so much for being with us today. You spoke at the GAWDA Annual Convention in Tampa. You’ll be speaking again to members in 2026 and beyond. We’ve got a long-standing relationship. So, let’s start there. As it pertains to the gases and welding industry, what do you expect to see from the economy in 2026?
Alex Chausovsky – Well, as we hopefully leave the tumultuousness of 2025 behind, I would call it cautiously optimistic that this year will be slightly better than what we saw from the industrial economy overall, and specifically for GAWDA members as a result of that. We have some momentum in relevant data series coming into the year. So, if you look at things like industrial production, for example, which is a great benchmark for anyone doing business in the B2B space, that is really starting to accelerate off of a low point in late 2025. And we’re not sure how quickly that momentum is going to go.
Obviously, policy agenda might throw a wrench in the works. Things like Venezuela, and potentially Greenland, or attacking Iran (Editor’s Note: This interview took place before the military action in Iran began). You know, these kinds of black swan events could absolutely prove to be disruptive. But I do think with the passage of the tax bill in mid-2025, a lot of that uncertainty is now off the table. People are looking at the interest rate environment and saying, “Well, we haven’t seen as much of a pullback in interest rates as we’d like.” But there has been a point, point and a half. We’re lower now in terms of borrowing costs. And there’s been a lot of kind of “hold your ground” views in 2025 that can’t continue forever, right? Business needs to evolve and grow.
So, we’re starting to see some cautious opening up of order books and volumes and things like that. I would not think that we’re going mid-single digit or high single digit growth, but I think the economy, specifically the industrial part of the economy, will give you that low two to three, maybe upwards of 4 or 5 % growth this year. If you want something more than that, as an individual company, in the space that GAWDA members operate in, you’re really going to have to rely on things like market share growth and new customer acquisition. So, basically, the economy is going to have, in my view, a little bit less of a headwind to us this year as it did last year, but it’s also going to be dependent on companies and how they react to that. How effectively they execute their sales strategies. Are they able to pick up some market share? Are they able to get some new customers that they didn’t have before? If you can do that, then you can achieve some better outcomes. Otherwise, the economy is going to give you relatively minimal growth in 2026.
GAWDA TV – You touched on interest and inflation. Those factors have really dominated the discussion for the last several years. As we move into this year, what are you seeing? What do you expect to see? And how will that impact GAWDA distributors, if at all?
Alex Chausovsky – I think it makes sense to start the response with a commentary on interest rate policy. So, when you think about interest rates as they pertain to the business environment, there’s essentially three layers of interest rates. There is the top layer, which is what’s called “restrictive interest rate policy.” That’s when the federal funds rate, which, of course, dominates and sets the rates for everything else, borrowing costs, mortgages, auto loans, any kind of borrowing activity on the business side.
Anytime that federal funds rate is at 4% or higher, that’s called restrictive. That means that the Fed is actively trying to slow down demand, to slow the economy. And they’re doing so because they’re trying to keep a lid on inflation, on price increases. So, we are now not in that space for the first time in a couple of years. In 2023 and much of 2024, we were in that restrictive interest rate policy domain.
Because of the cuts in interest rates that we saw over the course of 2025, we’re now in what I call neutral. So, anytime the Fed funds rate is between 3-4%, that’s called neutral territory. That means the Fed isn’t using interest rates to slow the economy, but they’re also not using low cost of borrowing to stimulate the economy, either. They’re just not getting in the way, basically. And so that’s where we find ourselves today, right around 3.5% on the federal funds rate. Most projections have them cutting once, maybe twice more in 2026. I don’t think we’re going to get a cut at the January meeting, for example. The latest numbers on the job market were good enough to stave that off.
Inflation is also not misbehaving too much. So, I think they’re going to adopt a little bit of a “wait-and-see” mentality. I imagine that March will probably be the time that they make a move of some kind. But even coming down from 3.5% to 3%, that doesn’t get us out of that neutral territory.
In order to get stimulative, where the Fed creates enough fiscal and monetary momentum in the economy in terms of low borrowing costs, encouraging investment, we would need to be below 3% and, really, it’s below 2% on the federal funds rate. And if you look at the way that the Fed has been telegraphing their future interest rate policy, they’re indicating they’re not planning on going into that low-interest rate environment anytime soon. Not in 2027, not in 2028. Their long-term rates are kind of holding around that 3% mark. I think that we should not expect interest rates to be a major catalyst of the next leg upwards in the U.S. economy.
On the flip side, interest rates are responsive to inflation. Inflation is really hard to predict right now because while we’re clearly not at the 2% target that the Fed has, but we’re not far from it, right? The latest reading that we saw was 2.7% on core, 2.6% on the overall CPI. CPI is the consumer price index, which is how you and I feel inflation in our day-to-day lives. There’s also PPI, which is the producer price index. That’s how companies feel inflation a little bit more. And so, we’ve got a benign inflationary environment in that regard.
And I think that the big question in my mind is, much of the early onset lack of understanding of the implications of tariffs has now been kind of felt, right? We’re through that period of uncertainty right now. We know that even if the Supreme Court rules that the IEEPA, or the International Emergency Economic Powers Act, tariffs that President Trump has used to set all of these category-oriented at the country level, even if the Supreme Court judges those to be unconstitutional and reverses them, the administration has already clearly signaled a shift towards more Section 232 tariffs, which is the Congressionally approved, product category oriented tariffs. So, I think it’s very evident that tariffs aren’t going away. Not in 2026, not in 2027. As long as President Trump is in office, that’s going to be the name of the game. The question, in my mind, is, as we have this kind of working of tariffs through the system, on average, tariff can take anywhere between nine and 18 months to fully work itself through in terms of price effects, right? So, as they work themselves through, it’ll be really interesting to see what that does to inflation. Right now, my expectation is inflation ends 2026 somewhere around where we are today, somewhere in that 3% to maybe just upwards of that 5% mark, but not substantially higher.
We’re certainly not going back to 9% or 10% inflation that we had back in 2021 or 2022. That should be somewhat conducive to businesses starting to come to life a little bit more than they were last year. So, overall policy agenda, I think is going to be a little bit more stable when it comes to the macro economy.
We’ve got a lot of questions from last year have been answered, at least in terms of taxation and things of that nature. And I think that will ease the headwinds facing GAWDA members and other industrial companies in 2026 and, hopefully, beyond.
GAWDA TV – Another kind of buzz topic, and you have specifically addressed this with GAWDA during your educational sessions at the SMC, has been labor availability and wage pressures. Specific to the industrial market, what would your outlook be? Do you see any relief to those problems on the near horizon?
Alex Chausovsky – Yeah, the labor market is such an interesting thing to talk about right now, because we’ve had a true transformation with regards to immigration policy and the amount of people that are actively coming into the country to take all of those blue-collar, physically demanding jobs that most Americans don’t want to do. I’m talking about frontline manufacturing, construction, and agriculture. And also, a lot of the front-facing, like customer service, leisure and hospitality, people that clean hotel rooms, people that are in the retail environment. It’s hard to find workers. The labor market data has been a little bit of a head scratcher for many people because they say, “Well, job openings are down. They’re not as high as they were.” The number of jobs that we’re adding on a monthly basis are much lower, specifically since April of last year, which is of course, coincident to that Liberation Day, April 2nd announcement where President Trump held up those placards and showed what the new tariff rates on all of the countries were going to be.
Since that point, we’ve got an average of only about 12,000 jobs per month that we added in the U.S. economy. Prior to that, it was over 100,000 per month, on average. So, a huge difference. But what’s happening is we’re not seeing the unemployment rate go up as a result of this, which is a little bit confusing to most people. But what is affecting that is that the denominator isn’t growing. The U.S. labor force is not growing. So, it doesn’t take as many labor job gains to maintain the unemployment rate where we are right now, which last month it actually pulled back from 4.6% to 4.4%, even though we only added about 50,000 jobs.
Now, getting to the heart of your question, I think even throughout the 23, 24, 25 timeframe, we saw certain positions be very, very difficult to fill. And I would say that that is true as we head into 2026 as well. I’m thinking about engineers. I’m thinking about accountants. I’m thinking about real experienced mid-level management personnel, not people that get promoted into management. Let’s say you’re a good salesperson and all of a sudden you’re a sales manager. I’m talking about people who have experience managing people that have experience dealing with personal issues and personalities and all of the stuff that goes into people management, right? The unemployment rate for those types of positions is somewhere in the 2-2.5% percent range. It’s like half of the normal unemployment. Those people remain very, very difficult to find. And I think we’ll see an increase in the difficulty of filling some of those. entry-level blue-collar jobs, because, prior to that, we had an influx of workers who were willing to do those jobs at relatively low wages that we no longer have. We’ve obviously seen a cut off of that last year. For example, we lost about 10,000 manufacturing jobs in the United States. And this is despite the fact that President Trump’s goal originally was to bring back U.S. manufacturing. We haven’t really seen that happen so far.
What I will say is that the labor challenges that GAWDA members face are not going to go away in 2026. In fact, they’re likely to exacerbate in 2026. And a big driver of that is the state of demographic change. The exit of the labor market by the boomers, their replacement or lack of replacement by the younger generations, especially in industrial roles. Gen Z, the younger millennials, they think that “my only path forward in a career is to get a college degree or to become a social media influencer.” That those are the only two things that are available to them. Which, of course, in reality isn’t true. There are tons of great-paying and great-needed jobs in the trades. Things like plumbing and electrical and HVAC and other things like that. I think the challenges in the labor market will persist.
In fact, one of the things that I recommend people to do is there’s a really interesting report put out by a company called Lightcast. I’m not affiliated with Lightcast in any way, but I found their research on this topic quite compelling. It’s called The Rising Storm. And this report basically talks about the fact that without fixing the legal immigration system in conjunction with stopping the flow of illegal immigration, as early as 2027, we’re starting to lose a couple of hundred thousand people from the U.S. labor force every single year, because we’re not replicating ourselves fast enough, right? The birth rate is too low. Without immigration, basically, these challenges that labor has faced are only going to get more acute.
I think that in order for GAWDA members to continue to stay ahead of this, they’ve got to rise above in terms of competitiveness, in terms of attractiveness to potential talent. They really have to have a solid value proposition of why somebody would want to come and work for them. You really have to differentiate yourself as an employer in order to win in this kind of environment.
So, my recommendation to anyone listening out there is make sure that you continue to work on your talent strategy. This is not a “you do it once and you set it to the side.” It’s an evolution. And you’ve got to be measuring things. You can only improve what you measure. So, look at your various data sets. How often do you get resumes when you put a job opening out there? What is your offer to acceptance rate? For every job offer you give, how often are people actually accepting it versus turning it down? Things like that. You’ve got to be able to keep that data, assess it, figure out what directionality it has, and then make adjustments on the fly. So that would be my recommendation.
GAWDA TV – Given the challenges that the industry has faced that are largely outside of our members control, i.e. supply chain, energy costs, geopolitical uncertainty, all those things, what are some of the economic indicators or data points that GAWDA members should track closely as warning signs of a slow down or potentially a growth opportunity?
Alex Chausovsky – There are leading economic indicators that consistently are able to predict, at a minimum, the directionality, the momentum in the market, if not the exact growth trajectory. Those are typically hard data points. If you use industrial production, which I referenced earlier, a few of the key economic leading indicators that I look at are things like capacity utilization rate. That typically predicts the industrial economy to the tune of about six months into the future.
I look at copper futures prices because copper is so prevalently used in the industrial economy that it has a nine-month lead time to the industrial sector.
And then the PMI, the Purchasing Managers Index, has a full year, 12 months lead time to industrial production. I also look at things that are not hard data, but rather reflect sentiment. Consumer confidence, CEO confidence. It’s not necessarily indicative of recession or not, but what you see is that after a certain amount of time, if consumer confidence or CEO confidence is in the dumps, they start to actually change their behavior. They stop spending money.
Watch for those inputs and gauge how the wind is blowing, if you will, in terms of how confident people are feeling about that. And then on the geopolitical side, I think it’s really important for folks to understand that having a single strategy these days is not the recipe for success. There are so many different variables in play geopolitically, politically, economically. We live in a very complex world, right? Policy-oriented laws and regulations change all the time, so you almost have to be prepared for a variety of different outcomes. And you have to bring a war games mentality to planning. So you have to say, okay, if scenario A happens, what will we do? What levers will we pull? How will we act? What about if scenario B takes place? How will we change our response? What about scenario C, D, E, and F, and so on and so forth.
There’s only a limit to the extent that you can do it, but maybe you can try the approach of thinking from a business performance perspective. So, in the base case scenario, these are the things that we’re planning on doing from an internal initiatives perspective. What happens in a worst case scenario? What happens in an optimal scenario? How will those things look from our decision-making perspective internally? Are we going to pull the trigger on a specific investment or not? What are we going to do about headcount? How do we handle inventory levels? How much inventory do we keep on track? How much do we raise prices next year, given the dynamics between interest rates and inflation? All of these things you have to play the “what if?” scenario and don’t be committed to a specific course of action.
Regardless of what’s happening, you’ve got to be malleable. You have to be able to adapt as new developments happen. You’ve got to be able to tweak it and revert. Change course in order to keep up with the reality of what’s happening in the world around you.
GAWDA TV – Last question for you, Alex. Given your familiarity with GAWDA and its membership, any parting words that you can offer with regards to the economy in the near future?
Alex Chausovsky – Well, I think that first and foremost, there’s so many things going on right now that elicit an emotional response from us, as individuals, but also as business leaders. And I think that you do yourself a disservice as a leader of an organization if you allow your emotional, fear-based, or anxiety-based response to guide your decision-making in your actions. So, the first piece of advice I would offer is be data-driven in your decision-making and
With that, you’ve got to be able to tell which data is reliable and which is not. And that’s one of the things that I do here at 3DM Consulting. I work with trade associations like GAWDA, with individual member companies, to help them see around the corner and make sense of what’s going on around them. Find those leading indicators and be able to strategize and develop plans for a very uncertain future. So, if you need some help in that area, I’m certainly happy to do so. Please reach out to me. My email is just [email protected].
The second element that you need to be aware of is what are the things that you can control in this environment? Focus on those elements. There are a lot of things that I’ve talked about that are outside of your control, right? What interest rates and inflation does, geopolitical developments, policy, etc. What can you control? Well, you can control things like how frequently you engage with your customers and your supply chain partners, right? Increase the frequency of the conversation and try to transform it from a transactional relationship to a value-added partnership. Share information with your contacts, and ask them to share what they’re seeing and hearing in exchange. That has the real benefit of building a moat around your relationship. And that way, if things do turn south, if there’s a recession looming out there, you’re not going to be the first one they look to make cuts. They’re going to try to preserve that relationship. So, that’s within your control.
Another area of control is to remember that you’re in business to make a profit, not to just drive top-line revenue growth. I’ve seen, over and over again, companies that say, “Look at what we did in terms of revenue! We grew six, seven, eight, nine percent last year!” What about your profits? Well, those were flat or even down in some cases, right? It is your profitability that is the sign of your future success. That’s the money that you’re going to use to reinvest in the business. So, make sure you’re maintaining margins, protecting your profitability, and remembering that you’re in business to make a profit, not just to drive revenue.
And then lastly, I would say for 2026, it’s going to be very important is look for ways to improve productivity and efficiency within your company. Be really self-introspective and ask, “Are we doing things a certain way because that’s the best way to do it, or is it just because we’ve always done it that way?” And look for opportunities to improve that efficiency and productivity. A lot of times, especially these days, that comes in through the implementation of new technology, right? Whether that’s AI or advanced analytics or any of the things that will allow you to realize those productivity gains and do more with what you’ve got instead of having to hire more or spend more in order to do more. If you can accomplish those three things in 2026, I think you’ll have a good year ahead.
