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U.S. Manufacturing Outlook Winners and Losers

Learn about the manufacturing industry's rebound in 2004, sector variances, consumer goods breakdown, investment sector growth, and materials recovery. Analyze high-tech, computers, traditional equipment, and end-market impacts on materials. Gain insights into market indicators and drivers for sales forecasting.

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U.S. Manufacturing Outlook Winners and Losers

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  1. U.S. Manufacturing Outlook Winners and Losers Frantz Price Managing Director, Industry Practices Atlanta Seminar April 29, 2003

  2. Manufacturing Will Rebound in 2004 • Much more volatile than GDP • Begins to recover in 2003:H2 • Strong Growth in 2004 • Performance uneven among industries

  3. An Inside Look at Manufacturing Key Sectors: • Consumer Goods • Investment Items • Materials

  4. Significant Differences by Sector • Strongest growth opportunities from investment sector • Recovery of consumer goods and materials sector expected to be moderate

  5. Breaking Down Consumer Goods • Durables and non-durables turn around in 2004 • But durables grow barely in 2005-2006

  6. Durables: Autos Stabilize After 2004 • Auto sales flatten out after next year, albeit at high levels • Falling housing starts and rising income have mixed impact on appliances

  7. Non-Durables: Drugs and Apparel on Opposite Courses • Apparel improves slightly but imports remain a major drag • Drugs rebound on favorable demographics and strong advertising campaigns

  8. Investment Sector: High-Tech Remains Growth Leader • Overall sector has been hampered by poor corporate profits, cost cutting, overcapacity, and Y2K • Picks up steam in 2004 as business conditions improve

  9. Computers Forge Ahead • Computers rebound from Y2K and poor business conditions • Telecom equipment comes back as supply bubble dissipates

  10. In Traditional Equipment Area, Aircraft Badly Trails • Industrial machinery recovers with profits and rising capacity • Hurt by airlines’ predicaments, aircraft does not recover until 2005

  11. Materials: Recovery Shaped by End-Market Mix • Overcapacity and poor demand have led to plant closings • Petrochemicals hit especially hard by surge in energy prices • Turnaround expected next year • Slowing end-markets after 2004 dampens growth

  12. Materials: Recovery Shaped by End-Market Mix • Uneven end-market performance exert mixed impact on Metals and Nonmetallic Mineral Products • End-markets: autos, appliances, traditional equipment, housing starts, non-residential construction

  13. Manufacturing Outlook: Recap • ManufacturingOutlook . poor 2003:H1 performance . turnaround begins in 2003:H2 . full-fledged recovery in 2004 • Growth uneven across industries • High-Tech sector remains growth leader

  14. Some Words of Wisdom… • General indicators can be misleading • Choose your market indicators carefully • End-market measures are best way to go • Knowledge of market drivers is essential • Use market-basket concept to benchmark and forecast company sales

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