the June 2008 Issue in PDF Format - Trade Show Executive

T r e n d i n g & S p e n d i n g
Sponsored by
Darlene Gudea,
VP/publisher & editor
Trade Show Executive’s
Trending & Spending Forecast
Fig. I: TSE Forecast of
Net Square Feet of Exhibit Space
3.3%
3rd Quarter
Fig. II: TSE Forecast of Number
of Exhibiting Organizations
2.0%
3rd Quarter
Fig. IlI: TSE Forecast of
Professional Attendance
1.5%
3rd Quarter
3.1% July
2.6% July
1.0% July
3.5%
2008
2.2%
2008
1.6%
2008
Fig. lV: TSE Annual Forecast
of Revenue
4.2%
Frank Chow,
senior economist
Year Ending December 2008
Corporate America and Trade
Shows Keep the Economy Humming
By Darlene Gudea,
VP/publisher & editor
Carlsbad, CA - A funny thing
happened while the U.S. economy was
headed to a recession: it got sidetracked,
said Frank Chow, senior economist for
Trade Show Executive magazine. While
the housing industry is still spiraling
down, new home construction posted
the largest increase in more than two
years in April gaining 8.2% and building
permits jumped 4.9%. While commercial
and investment banks are still writing
off huge multi-billion dollar losses from
the sub-prime debacle, many analysts
and a former Federal Reserve (Fed)
chairman are proclaiming a bottom to the
credit crisis. While economists expected
consumers to flee to the hills of frugality,
consumers started to increase spending
again in March and April, (excluding
autos). While job losses were escalating
since last December, in April the losses
slowed down to a trickle. The initial
reading for GDP growth in the First
Quarter was expected to be close to zero
or negative, but it recorded a surprising
0.6% gain. If the U.S. economy officially
sinks into a recession, it will not go down
without a good hard fight.
On the Rebound
The uncertainty about the recession
partly involves the counterbalances
that are at work in the economy, Chow
said. “Four of the five counterbalances
described in our February column have
played a significant role in the economy
rebounding back,” he said. These include:
(1) The Fed has cut its interest rates
to 2%, (2) Exports are booming, (3)
Housing is becoming more affordable,
(4) Foreign investment flooding in to the
U.S. has been enormous recently. “The
only counterbalance that has yet to occur
is falling gas prices,” he said. However,
gas prices have escalated mainly because
of the falling dollar and the lack of new
refining capacity in the U.S.
There is one major counterbalance we
failed to mention in the February column:
government intervention, Chow said. In
May, some households began to receive
the tax rebates passed by Congress and
the President. The economic stimulus
is expected to be worth $168 billion in
personal and business tax relief. This year,
the Fed began lending to non-commercial
banks for the first time in its history. The
Fed bailed out investment bank Bear
Stearns and stands ready to take more
such action. Restrictions on lending by
Freddie Mac and Fannie Mae have been
loosened. A bill going through Congress
would give a first-time home buyer
tax credit of $7,500 if passed. “Most
economists believe these measures will
help the economy avoid recession or at
least keep it short-lived,” Chow said.
A Recession May Be Over Before the
Official Call is Made
Contributing greatly to the confusion
is the so-called definition for a recession:
two consecutive quarters of negative
GDP growth. It may take a year before
the National Bureau of Economic
Research, the official arbiter of recessions,
decides to label this economic rough
patch an actual recession. “This is too
late to be of much value to businesses,”
Chow noted. And the economy may not
decline for two consecutive quarters. As
a result, some economists and journalists
think one quarter is sufficient for a
recession or a consecutive decline in
employment for four to six months.
Others say a substantial slowdown to
almost zero growth for two quarters is
enough. “All this subjective reasoning
Continued on page 16
14 June 2008 Trade Show Executive www.TradeShowExecutive.com