Prosperity in the Age of Decline:

Transcription

1 Prosperity in the Age of Decline: Presented by Brian Beaulieu Monday, May 2 1: p.m. 3: p.m. Sponsored by

2 /27/216 Prosperity in the Age of Decline Brian Beaulieu, CEO ITR Economics MHEDA's 216 Annual Convention & Exhibitors' Showcase 21 Forecast Results 2 Duration 21 Forecast Result Accuracy US GDP 18 $ Trillion $16.2 Trillion 98.9% US Ind. Prod (MMA) % Eur Ind. Prod (MMA) % Canada Ind Prod (MMA) C$ % China Ind Prod (MMA) % US Housing Mils. Units Mils. Units 98.1% US Retail Sales 13 $2.28 Trils deflated $2.2 Trils deflated 99.8% US Employment Million 18.8 Million 99.3% ITR Economics provides the best economic intelligence to reduce risk and drive practical and profitable business decisions. 2 Real Gross Domestic Product Sep-1 GDPCON 3MMA 1 1 '6 '7 '8 '9 '1 '11 ' '13 '1 '1 '16 '17 3MMA 3 1

3 /27/216 US Industrial Production to Gross Domestic Product US IP GDP % -2.9% -.3% -2.% GDP US IP -1.% '82 '8 '86 '88 '9 '92 '9 '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Year-over-Year, Quarter-to-Quarter (3/) Percent of 21 World GDP by Country.9%.9% 1.% 1.2% 1.% 1.6% 1.7% Russia 1.7% 1.7% 1.9% 2.1% 2.% 2.% 3.% 3.3% 19.1% Rest of World 3.9%.6% United States.6% China 2.% 1.% *Total 21 World GDP: $73.7 Trillion, US$ Data Source: IMF, *Most are IMF Estimated Figures 18% Interest Rates for Long-Term Government Bonds 16% 1% %.9% Latest yield 1% 8% 6% % 2% % -2% 2.6%.2%.61% 1.%.%.2%.7%.23% 8.8% 7.6%.91% 1.8% -.11%.93%.% 2.89% 3.26% 9.19% 1.61%.92% -.26% 1.6% 1.89% 6 Data Source: Trading Economics 2

4 /27/216 [IMAGE] WIRES 7 Source: NewAfrican Magazine Data Preparation Raw May-1 1. Jun-1 1. Jul-1 1. Aug-1 1. Sep-1 1. Oct Nov Dec Jan Feb-1 1. Mar Apr May Jun Jul Aug Sep Oct-1 1. Nov-1 1. Dec Jan Feb Mar Apr MMT / 1.9% 13.6% 13.6% 1.3% 1.6% 16.7% 13.3%.8% 1.% 1.% MMT % 2.% 2.2% 22.% 2.% 18.3% 1.%.7% 3/ Rate-of-Change = 1 1 = %. Rate-of-Change = 1 1 = %. 8 US IP 1 US Industrial Production to Material Handling Equipment New Orders Orders 7.3% 2-7 US IP -2-1 New Orders - '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Rates-of-Change 9 3

5 /27/216 Material Handling Equipment New Orders R-O-C 8 MMT 8 3/ 2.3%.3% MMT MMT '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Billions of Dollars 1 Mexico Lifting and Handling Equipment Production R-O-C 6 MMT / 1.% 1.7% MMT MMT '8 '9 '1 '11 ' '13 '1 '1 '16 '17 '18 Billions of Pesos 11 US IP 1 US Industrial Production to ITR Leading Indicator Reported in ITR Trends Report ITR Advisor Indicator Indicator - Monthly US IP '9 '92 '9 '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 USIP Indicator - Monthly

6 /27/216 US Purchasing Managers Index As seen in the -2-1/ '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 13-1/ Rate-of-Change Data Source: Institute for Supply Management Nondefense Capital Goods New Orders w/o Aircraft R-O-C 2 3/ MMT 1-3.1% -3.6% MMT MMT $ '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Billions of Dollars 1 Material 6 Nondefense Capital Goods New Orders w/o Aircraft to Material Handling Equipment New Orders Goods % -3.6% Material Handling Capital Goods - '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Rates-of-Change

7 /27/216 S&P Stock Prices Index Raw MMA Data Trends Data Source: Wall Street Journal S&P Stock Prices Index Raw MMA Data Trends Data Source: Wall Street Journal 1 $6, Real Personal Income Less Transfer Receipts Average per Person Age 18 to 6 $, $, $, $, $3, $3, $2, $2, 18 MMA Data Trend Data Sources: Federal Reserve Bank of St. Louis, U.S. Bureau of Labor Statistics 6

8 /27/216 R-O-C 1. US Retail Sales Excluding Gas Stations (deflated) 3/ MMT....2%.1% MMT MMT '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Trillions of Dollars 19 Retail Sales General Merchandise Stores 1.3 Jewelry Stores 1.7 Clothing Stores 2.1 Light Vehicle Sales 3.7 Beer, Wine & Alcoholic Beverage 3.9 Health and Personal Care Stores. Bldg Materials, Garden, Supplies.6 Furniture Stores 6. Online Retailers Rates-of-Change 2 Housing Starts R-O-C Mar 13 MMT.2 2 3/ 1.% 13.% May MMT MMT Dec '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Millions of Units 21 7

9 /27/216 Nonresidential Construction Medical Trends 1 Financial B C Housing Consumer Retail Prices A Production D Wholesale Trade Soft Landing Foreign New Orders Hard Landing 22 7% 6% % U.S. Dependence on Foreign Oil Declining Net imports as a share of domestic consumption 6.% 9.9% 8.2% 7.% 1.% 9.2%.7% % 3%.% 32.9% 2% 26.6% 2.% 1% % Data Source: Energy Information Administration Rig Count 1,7 United States Overview Weekly Oil Price & Rig Count USD/bbl $ 1, $1 1,2 1, 7 2 Oil Rigs WTI Price - Shifted 13 Weeks $8 $6 $ $2 $ Jan 21 Apr 21 Jul 21 Oct 21 Jan 21 Apr 21 Jul 21 Oct 21 Jan 216 Apr 216 Jul 216 Rigs: Weekly Count WTI: Average Weekly Price 2 8

10 /27/216 Exports US Trade in Goods with World: Exports to Trade Weighted Exchange Rate Index Exchange Rate /: -8.% Exports -7.6%.8% Exchange Rate 2 '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Rates-of-Change 2 Business Cycle Drivers Inflation Interest Rates Employment Consumer Construction 26 Industrial Material Handling Equipment Producer Price Index R-O-C 1 MMA 3 1 1/ % 1.% Raw 18-1 MMA '2 ' '6 '8 '1 ' '1 '16 '18 ' =

11 /27/216 Employment Private Sector Private Sector Employment Growth Job Openings Involuntary Part Time Employment Quit Rate Rising 2.3% C 1.9% C -.1% A 1 9 Employment Mils of Jobs 8 8 '92 '9 '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Annual Data Trend 28 US Overall Wage Growth Raw Data '6 '8 '1 ' '1 '16 '18 '2 29 Percent Millennials are: CONFIDENT VALUE TRANSPARENCY CONNECTED WANT TO FIND A BETTER WAY NOT MUCH MONEY 3 1

12 /27/216 Subject to peer influence Don t enjoy feeling taken for granted Want important leadership roles even though they can t contribute financially Need a continuum re: utilizing their professional skills Equally important: Time = Money = Assets Do-Gooders 31 Source: Case Foundation, Millennial Impact Project 6 FOMC Member Interest Rate Projections Fed Open Market Committee March Data Source: Federal Reserve % '82 '8 '86 '88 '9 '92 '9 '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 Yield on 1 Year Treasury Note

13 /27/216 US Industrial Production to Non-Residential Construction Index 1 Private Chemical +63.% Warehouse +17.2% Private Manufacturing +37.9% Construction Index Construction Data Trends Warehouse Buildings Construction R-O-C 8 MMT 3 3/ 19.2% 17.2% MMT MMT '96 '98 ' '2 ' '6 '8 '1 ' '1 '16 '18 '2 Billions of Dollars 3 Expenditures 2 16 National Defense Expenditures to Defense Capital Goods New Orders Expenditures Orders Orders Carter Reagan Bush Clinton Bush Obama Rates-of-Change 36

14 /27/216 Depression Drivers Demographics Inflation Health Care Costs / Entitlements US National Debt 37 1 Total U.S. Public Debt 2.2% The Long View (% of GDP) Estimated Percent of Total Population in 23 Age Group US China India Ger Mex Braz Japan Can 6 & older less than

15 Join our list! /27/216 ITR Management Objectives Preparing for the Rise Ahead 1. Budget for the rise do you have enough. 2. Invest in customer market research to reduce price sensitivity 3. Make sure your training and retention programs are top notch. Drive efficiencies with technology. Hire sales people and leaders 6. What are you going to do to avoid 219? Join our list! Receive monthly updates on the economy with the subject line MHEDA 1 1