the November 2009 Issue in PDF Format - Trade Show Executive

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Trade Show Executive’s
Trending & Spending Forecast
Fig. V: Sector Performance
Best Performing sectors
• Hospitality
• Transportation
• Medical
mixed Performance
• Business Services
• Communications
• Entertainment
sectors under Pressure
• Apparel
• Automotive
• Construction
• Government
• Sporting Goods
• Technology
• Food
• Manufacturing
• Retail
Fig. VI: Economic Indicators
Consumer Confidence fell in October, dropping to
(47.7) from a revised September figure of 53.1.
However, confidence was up considerably over
last year’s figure of 38.8.
Gross Domestic Product advance estimates from
the Bureau of Economic Analysis showed an
increase of 3.5% for the Third Quarter of 2009,
reflecting positive contributions from exports,
Federal government spending and personal
consumption expenditures, among others.
Housing Starts for privately-owned homes rose
0.5% in September from August, marking a
seasonally-adjusted gain of 590,000. Single
family construction rose 3.9%.
Industrial Production rose in September by 0.7%,
after a revised gain of 1.2% in August.
Core Inflation, excluding food and energy costs,
fell in September by (0.1)%, reversing an
increase in August.
Interest Rates (short term) remained near 0% in
October. The Federal Funds rate was sustained at
a range between 0% and 0.25%.
Job Losses continued in September, with a total loss
of (263,000).
The Index of Leading Economic Indicators
increased 1.0% in September, following an
adjusted 0.4% gain in August. It was the sixth
consecutive month for growth.
Manufacturing expanded for the third consecutive
month in October, with the PMI reaching 55.7%.
The rate of growth is the highest since April
2006, when the PMI stood at 56%.
Retail Sales fell by (1.5)% in September from
the previous month after increasing by 2.2% in
August.
Unemployment continued to increase again in
September, reaching 9.8%, a 28-year high.
Sources: U.S. Department of Labor, Bureau of Labor Statistics; The
Conference Board; The Institute for Supply Management (ISM);
U.S. Commerce Department
• Develop plans to reduce costs
for community banks to lend to
small businesses. The initiative
comes as experts now predict
that as many as 1,000 small
banks may fail before the
economy fully recovers.
• Purchase securities from
Fannie Mae and Freddie Mac
to support new mortgage
lending by Housing Finance
Agencies, which are state and
local agencies assisting low
and middle income families
to purchase low interest loans
or attain affordable rental
housing.
• Single family housing is stabilizing:
Housing starts have been flat for
four straight months after a big
rebound earlier in the year from
historic lows. Since the bottom in
January, housing starts have risen
21%, chiefly due to construction of
single family homes. Although
multi-family units slumped (15)%,
single family construction rose 3.9%
in September and it accounts for
85% of the housing industry. After
14 straight quarters of declines,
many economists expect that
residential investment will finally
add to GDP growth in the Third
and Fourth Quarters of this year.
• Strong corporate profits: Corporate
profits reported for the Second and
Third quarters have been stronger
than expected. Though profits have
been mainly due to steep costcutting,
the Third Quarter has seen
revenue growth in many companies,
Chow pointed out. This has led to
a big rebound in the stock market,
regaining some of the consumer
wealth lost in the recession.
• Higher exports: The falling dollar
has made U.S. goods and services
cheaper, leading to a net increase
in exports which helps U.S. GDP
growth, said Chow.
Happy Holidays?
Given these trends, many different
surveys and forecasts have pointed to
an improved holiday season, but how
the cautious shopper will act remains an
open question, said Chow. ShopperTrak,
a retail research firm that tracks customer
traffic at more than 45,000 stores,
estimates that total holiday sales will
rise 1.6% from a year ago. The 2008
holiday season saw the biggest sales
decline in several decades. Bill Martin,
co-founder of ShopperTrak, believes
the expected increase in sales will reflect
pent-up consumer demand. However,
the research firm also expects a (4.2)%
decline in foot traffic on top of last year’s
whopping (15)% drop, Chow noted.
With the nation’s unemployment rate
nearing 10%, the economy remains the
biggest concern for most consumers.
The National Retail Federation (NRF),
usually bullish about holiday sales, predicts
a (1)% decline in total sales to $437.6
billion for November and December
combined. According to a NRF survey,
consumers’ holiday budget is expected to
decline (3.2)% to $682.74. Nearly 70% of
shoppers plan to buy at discount stores,
and big discounters such as Wal-Mart and
Target will benefit. The percentage of
shoppers planning to buy at department
stores, clothing shops, electronic chains
and even online all are on the decline.
“While the economic climate has shown
some improvement from last holiday
season, retailers are not out of the
woods yet,” said Phil Rist, executive
vice president of strategic initiatives at
BIGresearch, which helped conduct the
survey. “With a variety of factors still
up in the air, including uncertainty over
job security, many Americans just aren’t
buying into the talk of recovery.”
How Bad is the Job Market?
The U.S. unemployment rate hit a
28-year high of 9.8% in September,
according to the Labor Department.
But that number expands to 16.8%
when you add those who have stopped
looking for a job and those who are
underemployed, said Chow. “When
Continued on page 14
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