2014 Forecast Results

Transcription

1 214 Forecast Results Duration Forecast Result* Accuracy US GDP 15 $16.98 Trillion $ Trillion 98.5% US Ind. Prod (12MMA) % EU Ind. Prod (12MMA) % Canada Ind Prod (12MMA) % China Ind Prod (12MMA) % US Housing Ths. Units 989 Ths. Units 96.4% US Retail Sales 16 $2.751 Trillion $2.88 Trillion 97.9% US Employment Million Million 99.% 1 1 *Denotes year-end estimate based on most recent data available

2 US IP 12 US Industrial Production to Gross Domestic Product GDP % % % -5.8% GDP US IP -15.1% '82 '84 '86 '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 ' Year-over-year, Quarter to Quarter (3/12) 2

3 US Industrial Production Index US Industrial Production Index 12-Month Moving Average Year-over-Year Growth Rate 12/12 Rate-of-Change MMA is 1.8% higher than the Nov 13 forecast estimate is.8 percentage points higher Annual Trend: 13.7 Phase: B Year-over-Year: 4.1% Industry Outlook 214: 3.8% 215: 2.4% 3

4 19 Real Gross Domestic Product '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 '17 '18 '19 12 Trillions of $ 4

5 Data Preparation Raw Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul MMT / % 13.6% 13.6% 14.3% 14.6% 16.7% 13.3% 12.8% 1.4% 1.4% 12MMT / % 25.5% 25.2% 22.4% 2.% 18.3% 15.4% 12.7% 3/12 Rate-of-Change = JJJJ 214 3MMM JJJJ 213 3MMM 1 1 = = 1.4% /12 Rate-of-Change = JJJJ MMM JJJJ MMM 1 1 = = 12.7% 18. 5

6 Company A 45 Phase 2 Accumulate the Inputs 6 Indicator Company A Indicator - 1/12 '6 '7 '8 '9 '1 '11 '12 '13 '14 '15 '

7 Crude Oil Futures Prices to Cushing Hub Inventories Sales Index 9 6 The Cusing Hub Inventories 12/12 has a 16 month lead time to the Crude Oil Futures Prices 12/12 through business cycle highs and lows Sales -3 Index Correlation: '99 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 12/12 Rates-of-Change 7

8 Crude Oil Futures Prices to JP Morgan Global PMI Sales 9 6 The JP Morgan Global PMI 12/12 has a 1 month lead time to the Crude Oil Futures Prices 12/12 through business cycle highs and lows. Low Oil and weak demand Steel PI 1/12-1.4% 3/12 1.8% C Index Sales -3-6 Index Correlation:.42 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 '13 '14 '15 ' /12 Rates-of-Change 8

9 R-O-C 15 U.S. Oil & Gas Extraction Production Index 12.2% 11.2% 62+ yrs MMA 25 3/12 12/ Accuracy 15 mos 96.% -15 3MMT 12MMT First 3 Qtrs all BTN Oct and Nov about average % '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 ' = 1 9

10 US IP 1 US Industrial Production to Information Technology New Orders Orders % Index Orders 3/12 1.% C 3Q normal decline Oct- median, Nov STN decline 12MMA stalled at 24-mos high % % -3 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 12/12 Rates-of-Change

11 US IP 12 8 US Industrial Production to Fabricated Metal Products Production US IP Metal Production NAICS: 332 Transformation of metal into intermediate or end products, other than machinery, computers and electronics. Metal % Accuracy 12 mos 99.4% 3/12 3.6% C 3Q MTA rise 4Q average 12MMA at a 6-yr high % % /12 Rates-of-Change

12 US IP 12 8 US Industrial Production to Chemicals & Products Production US IP Chemicals 214 Accuracy 17 mos 98.1% Chemicals % NAICS: 325 Transformation of organic and inorganic raw materials by a chemical process and the formulation of products 3/12 4.6% B 3Q best since 1996 Oct and Nov = normal 12MMA at a record high Cap Utl 77.9%, above 2yr avg % % '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 ' /12 Rates-of-Change 12 12

13 1 Mexico Industrial Production Index to US Industrial Production Index % -5 12MMA at a record high for the fifth consecutive month. Exports to the US US IP Mexico % % '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 ' /12 Rates-of-Change 13

14 1 Mexico Industrial Production Index to Mexico Beverage & Tobacco Production Index 1 5 [SERIES NAME] Bc 1.6% 5-5 Beverage Mexico 3/12 4.1% C 3/Q best rise since 9 Oct MTN rise Nov STN decline 12MMA at a record high -5-1 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2-1 12/12 Rates-of-Change 14

15 Brazil Industrial Production Index /12 12/12 Oil production is hurting on low prices. Exports 3/12-17.% % % 1-3.2% -3.7% '4 '6 '8 '1 '12 '14 '16 '18 ' = 1, NSA 15 Data Trends

16 US IP 3 US Industrial Production Index to Japan Robots Production Index Robots % 4.1% US IP Robots '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2-7 12/12 Rates-of-Change 16

17 Japan IP Japan Industrial Production Index to Japan Robots Production Index 3/12-1.2% D Automobile Production down % % Robots % 2.7% Japan IP Robots '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2-7 12/12 Rates-of-Change 17

18 R-O-C Japan Robots Production Index 3Q -9.1%, 2x STN Steepest since 29 Oct and Nov normal 12MMA record high [SERIES NAME] Bc 2.6% 14. MMA '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 21=1 18

19 US/Global Recovery Good Days Ahead Leading indicators pointing up World is relatively calm Employment rising Banks are lending Retail Sales are rising Non-residential construction is improving Deficit spending continues no appetite of austerity 19

20 Percentage Delinquency Rates on Consumer Loans Lenders are increasing the amount of credit available for consumer installment loans. Consumer demand has risen for the second quarter in a row. Percentage Year Average 1 Year Average Consumer Loan Delinquency Rate Consumer Credit Card Delinquency Rate MMA Data Trends

21 Steel Scrap Producer Price Index R-O-C 15 Monthly down a slightly STM 23.% Another 4-11 months w/b normal MMA /12 12/ % -1.4% MMA MMA 3-2 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 ' = 1, N.S.A. 21

22 12 Employment Private Sector Private Sector Employment Growth 2.2% B Job Openings 15.4% B Involuntary Part Time Employment -8.2% D U6 11.2% April % Quit Rate rising Employment Mils of Jobs 85 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 Annual Data Trend 22

23 FOMC Member Interest Rate Projections 6 5 Fed Open Market Committee Source: Federal Reserve

24 ROC 15 Total Manufacturing Production Index NSA 24 MMA 16 3/12 12/12 4.5% 3.6% MMA 12MMA '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 6 27=1

25 US Annual Auto Exports 25

26 Chemical Industry Manufacturing Total Industry Fabricated Metal Products Mining (w/o oil & gas) Iron and Steel Products Machinery Manufacturing Autos & Light Duty Trucks Utilization Rate Year Avg Oil & Gas Extraction Raw Data

27 Ongoing Concerns S&P 5 gives way to steeper-than-median decline Fear of instability from low oil prices Europe slowing down South America Higher Affordable Care costs sap the consumer China s Debt Problems 27

28 Global Leading Indicators % Eurozone Composite PMI -2.6% JP Morgan Global Mfg PMI -4.% EU Manufacturing PMI EZ Comp PMI EU Manufacturing PMI JP Morgan Global MFG PMI '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 '17 '18 '19 ' /12 Rates-of-Change Source: Markit Economics

29 Europe Imports and Exports Export Volume Import Volume 5 29

30 Corporate Profits to US Industrial Production Profits 45 USIP %.4% Profits USIP Correlation:.65 The US Industrial Production (USIP) 12/12 has a 9 month lag time to the Corporate Profits 12/12 through business cycle highs and -45 '91 '92 '93 '94 '95 '96 '97 '98 '99 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 ' /12 Rates-of-Change 3

31 Total Expenditure on Health as a Percent of GDP ( ) 18 Health Expenditure Percentage (%) US FR SWIZ GER CAN NETH NZ DEN SWE UK NOR AUS '9 '91 '92 '93 '94 '95 '96 '97 '98 '99 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 '13 31

32 US Receipts and Federal Debt (Constant FY25 M$) ,,. 16,,. 14,,. 12,,. 1,,. 8,,. 6,,. 4,,. 2,, Receipts Gross Federal Debt 215 estimate 218 estimate 32 Source: The White House Office of Management and Budget

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34 Financial Production Consumer Prices Nonresidential Construction Retail Medical B C Trends 1 Wholesale Trade Foreign New Orders Housing Soft Landing Soft Landing A D Hard Landing 34

35 R-O-C 2 Nondefense Capital Goods New Orders w/o Aircraft MMT 15 3/12 12/12 8.6% 5.6% Oct STM decline Nov -9.2%, 1yr avg -4.89% 1 3MMT 12MMT $ '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 5 Billions of Dollars 35

36 US IP 15 1 US Industrial Production to ITR Leading Indicator Reported in ITR Trends Report ITR Advisor Leads by 9-12 months Indicator Indicator - Monthly US IP - 12/12-15 '8 '82 '84 '86 '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 USIP 12/12 Indicator - Monthly 36

37 Purchasing Managers Index % / '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 1/12 Rate-of-Change 37 Source: Institute for Supply Management

38 Ratio of Inventories to New Orders 1.12 Dec ' Raw Dec '9.82 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 Raw Data 38

39 US Leading Indicator % / '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 ' Source: The Conference Board

40 Stock Prices Index 4 R-O-C 6 MMA 42 1/ / % 13.% Actual MMA -9 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2 2 S&P 5, = 1 4

41 R-O-C 9 5 Total Retail Sales (deflated) Sizzling Auto Sales? 15.77% 1yr avg 23.48%, Dec % 3/12 12/12 4.6% 3.6% MMT Accuracy to date 14 mos 99.1% 3MMT $ Seasonal rise best since MMT % % '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 ' Trillions of Dollars 41

42 R-O-C 4 Housing Starts Mar 13 MMT /12 12/12 8.1% 7.8% May MMT 12MMT Dec '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 '18 '2.2 Millions of Units 42

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