CEMA Marc Mar h c 2013 Alan Alan Beaulieu ITR E c E onomics ITR Economics

Transcription

1 CEMA March 213 Make Your Move: Alan Beaulieu ITR Economics

2 212 Forecast Results 2 Duration Forecast GDP 12 $ Actuals $ Trillion $ $ % US Ind. Prod (12MMA) 97.2.% EU Ind. Prod (12MMA) (12MMA) % CA Ind. Prod *.% Retail Sales 3 $2.186 Trillion $ % Housing Ths Units 78 5.% Employment Million % CPI 9 2.8% 2.1% * End of year 12 month index estimate

3 US Industrial Production to Gross Domestic Product % % 3.1% 5.3% GDP US IP 14.6% '82 '84 '86 '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 Year over year Quarter to Quarter (3/12)

4 Real Gross Domestic Product Trillions of $ '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 1.5

5 US Industrial Production Index to Material Handling Equipment New Orders 5 US IP months 2.6% dev % Orders US IP New Orders '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

6 US Industrial Production to Industrial Machinery New Orders US IP 2 Orders % US IP New Orders -2 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 12/12 Rates of Change -9

7 US Industrial Production to Wholesale Trade Durable Goods US IP months.5% dev % Wholesale l % US IP Wholesale '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

8 US Industrial Production to Nonmetallic Minerals Products Production Index 12/12 Minerals Rates of Change US IP 15 3 months 1.2% dev 1.1% Minerals US IP '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

9 US Industrial Production to Mining (excluding Oil & Gas) Production Mining 4 1 months 1.6% dev Stays negative in 213 US IP % Mining Production US IP '82 '84 '86 '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

10 US Industrial Production to Medical Instruments Production US IP months 3.6% dev Positive 9.8% Medical US IP Medical Production '82 '84 '86 '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

11 US Industrial Production to Wood Products Production Index 11 US IP Wood Products % US IP 21 months.9% dev 213 Slower than 12-2 Wood Products -15 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

12 Recovery 12 Leading indicators pointing up Liquidity is not an issue Exports are up Stimulative monetary policy Employment rising (companies right sized) Banks are lending Retail Sales Construction spending is improving

13 Delinquency Rates on Consumer Loans 13 Percentage Percentage Lenders are increasing the amount of credit available for consumer installment loans. Consumer demand dhas risen for the second quarter in a row Consumer Loan Delinquency Rate Consumer Credit Card Delinquency Rate 2. 1 Year Average 1 Year Average MMA Data Trends

14 Mortgage Rates to Federal Funds Mortgage Rates Federal Funds Raw Data

15 U.S. Dependence on Foreign Oil Declining Net imports as a share of domestic consumption % % % % % % 45 % % 41% Source: Energy Information Administration

16 One (or many) bright spot(s): the shale gale 16 Source: EIA Annual Energy Outlook, 28 to 211

17 US Manufacturing as a % of GDP (Value Added) % % '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 1 3MMA

18 Areas of Concern 18 Europe s financial troubles China recession? Massive legislative changes Oil prices could break through $12 Fiscal Cliff Tax Hikes Massive deficit and growing nat l debt

19 Employment Private Sector Minimum Wage to $9? 1 95 Healthcare Reform impact Employment Mils of Jobs '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' Annual Data Trend

20 Western Europe Industrial Production 2 Year Over Year Growth Rates %

21 Global Leading Indicators OECD Total EU Manufacturing PMI JP Morgan Global MFG PMI '7 '8 '9 '1 '11 '12 '13 '14-8 1/12 Rates of Change

22 FTSE 1 and DAX Stock Index FTSE 1 DAX Stock Index '5 '6 '7 '8 '9 '1 '11 '12 '13 ' Annual Year over Year Comparison

23 National Defense Expenditures to Defense Capital Goods N.O. 23 Expenditures Expenditures Orders Od Orders Carter Reagan Bush Clinton Bush Obama /12 Rates of Change

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25 Sequestration 25 Source: John Taylor, Bloomberg

26 Total U.S. Public Debt % (% of GDP)

27 Surplus/Deficit as a Percentage of GDP 27

28 World Countries Industrial Production 28 Year Over Year Growth Rates %

29 Nondefense Capital Goods New Orders w/o Aircraft 29 R-O-C 4 MMT 16 3/ / MMT $ MMT 6-8 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 4 Billions of $

30 US Industrial Production to ITR Leading Indicator US IP 21 Indicator Indicator - Monthly US IP - 12/12 '8 '82 '84 '86 '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' USIP 12/12 Indicator Monthly

31 Chicago Fed National Activity Index Feb ' Sep ' MMA '7 '8 '9 '1 '11 '12 ' Month Moving Average

32 Purchasing Managers Index Raw '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' Raw Data

33 US Leading Indicator Actual 12MMA '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 6

34 Stock Prices Index 34 R-O-C 6 MMA 42 1/ / Actual 12MMA '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16 2 S&P 5, = 1

35 Corporate Bond Prices Sep ' /12 Aug ' /12 '8 '9 '1 '11 '12 '13 '14-2 Rates of Change

36 University of Michigan Consumer Expectations Index /12 12/12 '7 '8 '9 '1 '11 '12 '13 ' /12 Rate of Change

37 Housing Starts 37 R-O-C 6 MMT /12 12/ MMT 12MMT '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 '16.2 Millions of Units

38 US Industrial Production to Private Non Residential Construction 38 Construction US IP Private Construction US IP '82 '84 '86 '88 '9 '92 '94 '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

39 Construction Sand, Gravel & Crushed Stone to Private Nonresidential Construction Private 3 Construction Private Construction Construction '96 '98 ' '2 '4 '6 '8 '1 '12 '14 ' /12 Rates of Change

40 7 Must Watch Items 4 ITR Leading Indicator Chicago Fed National Activity Index US Leading Indicator Purchasing Managers Index Retail Sales Employment Nondefense Capital Goods New Orders Available from ITR via ITR Trends Report, the ITR Advisor, or on the web

41 Sample Annual Sales & Growth Rates 41 ROC 5 Dt Data Trend % -3.7% $ '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 '13 '14 5 Millions of $

42 Example Series 42 ROC Rates of Change Rates of Change RISING RISING Momentum Rates of Change Momentum is positive is positive FALLING 3/12: 11.7% Momentum is negative Moregrowth (2 month ahead high) 12/ % 3/12: 3/12: (rise 9.4% (11 month low) 26.8% for (45 2 nd month straight high) month) 12/12: 16.5% (3 month low) 12/12: 5.7% (13 month high) Dt Data Trend January 21 Annual Production: $61.1 million 3 th consecutive month of rise Production at 21 year low October July Annual Production: $94 $13 million 7 th 16consecutive th month month of rise of rise Production at at 597 month high point '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 '

43 Phase Management Objectives TM Preparing for Positive leadership modeling (culture turns to behavior) 2. Invest in customer market research (know what they value) 3. Training programs (people, process, internal metrics) 4. Review and uncover competitive advantages 5. Spend $ on new products, marketing, advertising 6. Improve efficiencies with investment in technology and software 7. Check systems for readiness to accommodate increased activity 8. Add Sales Staff and Hire Top People 9. Lock in costs 1. Judiciously examine credit 11. Work on what s next

44 It is always the adventurers who do great things, g, not the sovereigns of great empires Charles De Montesquieu

45 Complimentary Copy of the ITR Advisor 45 Concise 4 Page Report Excellent Economic Snap Shot" Consists of Current Events, Brief Industry Segments, Snap Shot Indicators, Readers' Questions, Fed Notes, ITR Opportunity Index, and more Delivered Monthly