the May 2008 Issue in PDF Format - Trade Show Executive

T r e n d i n g & S p e n d i n g
Trade Shows Still Bucking
Economic Trends – So Far
Darlene Gudea,
VP/publisher & editor
Trade Show Executive’s
Trending & Spending Forecast
Fig. I: TSE Forecast of
Net Square Feet of Exhibit Space
3.0%
3rd Quarter
Fig. II: TSE Forecast of Number
of Exhibiting Organizations
3.0%
3rd Quarter
Fig. IlI: TSE Forecast of
Professional Attendance
1.5%
3rd Quarter
4.0% June
3.6% June
1.3% June
3.1%
2008
3.2%
2008
1.6%
2008
Fig. lV: TSE Annual Forecast
of Revenue
4.1%
Frank Chow,
senior economist
Year Ending December 2008
By Darlene Gudea,
VP/publisher & editor
Carlsbad, CA - “When the Federal Reserve
negotiates an unprecedented bailout to
save a multi-billion dollar investment
bank, it is a sure indication that the
economy is in deep trouble,” said Frank
Chow, senior economist for Trade Show
Executive magazine. That’s what happened
when the Fed brokered a deal for J.P
Morgan to buy Bear Stearns for two
dollars a share, he said. Just a little over
one year ago, Bear Stearns was trading
for about $170 a share. Chow noted that
the Fed developed some other innovative
measures to pump more liquidity into
the financial markets. These actions and
others by the Fed, the Administration
and Congress come from a belief that
without such intervention, a huge bank
failure would cause a cascading panic and
possibly usher in a severe recession.
More Bad News on the Economic Front
While the stock market is welcoming
the interventions, Chow said, more bad
banking news continues to trickle out.
The latest is that Wachovia, the fifthlargest
U.S. bank by market cap, is seeking
$6 to $7 billion in emergency capital.
Citigroup and Merrill have released
another $15 billion in sub-prime writedowns.
Washington Mutual lost $1.14
billion in the First Quarter and had to set
aside another $3.51 billion in mortgage
losses. The International Monetary Fund
(IMF) thinks the full cost of the credit
crunch could be $945 billion, just under
a trillion bucks. With $232 billion written
off by Wall Street so far, that would mean
about $700 billion more to go!
Most analysts believe the Fed actions
and the tax rebate may be enough to
forestall a recession or at least keep it
mild, Chow said. However, the latest
data shows the economy is still trending
downward:
• The March payroll report recorded
a loss of 80,000 jobs, the largest
decline since 2003. Also, the 63,000
drop in February was revised to
75,000. The national unemployment
rate was up to 5.1% from 4.8%
in February. Almost 3 million
Americans are now unemployed.
Gains in the government, mining and
food-service sectors were more than
offset by losses in manufacturing,
construction and services.
• Bankruptcies in U.S. jumped 30% in
March, with the sharpest rise in the
bubble states of California, Nevada
and Florida. Bankruptcy filings for
2007 soared 38% as reported by the
Administrative Office of the U.S.
Courts.
• Housing starts in the U.S. plunged
11.9% to a seasonally adjusted annual
rate of 947,000 in March, according
to the U.S. Commerce Department.
Housing starts were down 36.5%
compared with a year ago. March’s
activity was the lowest for housing
starts since March 1991.
• Building permits dropped 5.8% to
927,000 in March, 40.9% below the
same month a year ago.
• Thomson Financial projects First
Quarter earnings for S&P 500 firms
will fall 12% from a year ago with
financial institutions, homebuilders,
and automakers reporting the bulk of
the losses. Thomson sees profits for
the financial sector falling 60% from
a year ago. However, Thompson
believes the energy sector will show a
28% profit gain.
On the plus side, retail sales and
industrial production increased. In
Continued on page 16
14 May 2008 Trade Show Executive www.TradeShowExecutive.com