The Economy: With recovery slow, don’t expect hot commercial construction again till 2015.
Energy Prices: Even with abundant U.S. supply, natural gas prices will rise through 2011.
Green Regs: Coal ash—soon to be classified as a hazardous material—is no longer green.

The Economy
Believe it or not, over the long run …
Consumers pulling back is a good thing, restoring balance to the U.S. economy after a binge of credit-driven spending coupled with undersaving.

Yes, the abrupt withdrawal is painful. And recovery will come slowly … pokey growth, paltry hiring, and piddling wage gains.
But in time … a more stable economy, drawing its strength from multiple sources. A return to healthier growth … Less dependent on borrowed money.
As consumers’ share of GDP shrinks … reverting from about 71% now to the 66%-68% slice held before the dot-com boom, the housing bubble, and easy credit turbocharged consumer spending …
What will take up the slack? Exports. Likely to grow only about 5% in 2010, they’re poised to take off after that as economies around the globe shake off the recession and begin to expand again. Aircraft, tech, and financial services will all benefit.
And business spending. By the second half of next year, look for firms to start buying equipment, bumping up investment by 1% for the year. By the middle of the decade … bigger gains … as construction spending picks up, once the overhang of office, retail, and factory space is worked through.
Odds are it’ll take about four years for the transition, replacing the engine of consumer growth with other, smaller but potentially powerful, locomotives. Growth of just 5% for exports and business, well within recent historical boundaries, would easily offset the loss of consumer steam power. A three percentage point drop in the personal consumption spending share of GDP amounts to $420 billion today. Exports alone increased by $350 billion in the two-year period of 2006 and 2007.
Meanwhile, the economic pace will be distinctly subpar. In the 12 months following a recession, GDP typically racks up a gain of about 6.5%. Not so this time. With unemployment remaining stubbornly above 9% through all of next year and consumers still holding back … generating a mere 1.5% gain in spending … overall 2010 growth is likely to be less than half the usual post-recession glow.
For businesses, the absence of overheated consumers has a silver lining:
Subdued inflation … helping to keep interest rates steady and moderate. Measuring Dec. to Dec., the Consumer Price Index won’t climb over 2% in 2010 and won’t head much higher for a few years. What’s more, stocks should do well in such a climate, providing businesses with a favorable return on capital investment.
One threat to the new balance: Federal spending. Unless President Obama and Congress apply a brake, big deficits will lead to rising interest rates and inflation.

Energy Prices
The long-term outlook on natural gas prices is an encouraging one. New technology will allow producers to tap huge reserves in Texas, N.Y., Pa., Ohio, and W.Va. Record yields will outstrip the growth in demand for years to come.
The near-term picture is not so good. Prices will rise to an average of $4.50 per million Btu next year and to $6.50 in 2011 and 2012, up from $3.50 this year. But we see no return to the $9 to $14 price range that characterized recent years.

Green Regs
Need more proof that the EPA under Obama is getting tougher on business?
Examples abound. By year-end, the agency will propose stiffer smog rules that will force power plants, factories, and others to limit emissions, driving up costs. Look for a ground level ozone limit of 60-70 parts per billion, down from 75 ppb, the standard adopted last year under Bush. The Environmental Protection Agency will finalize the change by Aug. Health experts, environmentalists, and farmers, whose crops and livestock suffer from the effects of smog, will welcome the decision.
Two new EPA rules on power plant waste will also raise business costs.
The first, due next month, will classify coal ash as a hazardous material, reversing a 2002 decision that allowed much of the solid waste to be recycled for use in cement, drywall, blasting grit, and roofing shingles. It will be banned, making construction more expensive. Coal ash contains arsenic, lead, and mercury.
The second will make power plants clean wastewater from steam turbines. That regulation, likely in 2010, is sure to boost the price of electricity. It'll also set a precedent for stricter rules on wastewater discharges from factories.
Some teeth, finally, for the 25-year-old effort to clean the Chesapeake Bay. Under an executive order, seven different federal agencies are developing plans to clean up a watershed covering 64,000 square miles in six states and Wash., D.C. The EPA will eventually deny funds to states that don’t meet water quality standards.
Expect a regulation in 2010, with legislation to back it up soon after.
The move will set a precedent for dealing with nonpoint source pollution … nutrients or chemicals that rains wash off the ground and into waterways or air pollution from power plants that ultimately settles on the water’s surface. The same approach may be applied to much of the Gulf of Mexico, where pollution from the Mississippi River has created serious problems over 8,500 square miles.