2011 AIMCAL MARCH MANAGEMENT MEETING Speakers

orders indexes rising into the high 50s.
However, the reacceleration in China
could be mostly behind us. The People’s
Bank of China has raised reserve
requirements for the fifth time this year
to slow inflation and is likely to raise
interest rates before the end of the year.
This would presumably slow growth next
year. Allowing the Yuan to appreciate
against the dollar, perhaps necessary to
keep quantitative easing in the United
States from causing unacceptably high
inflation in China, would also curb
export-led growth.
PMIs (total and new orders) also
turned up in the Euro-Zone, United
Kingdom, and India in October after
recent declines. The PMI rose to a new
cyclical high in Poland, where growth in
industrial production is nearly as strong
as in China. PMIs fell in Japan and in
Korea. The latter is a bit of a concern
since Korea tends to lead the global
economy. Except in China and perhaps
Taiwan, industrial production indexes,
which have a long publication lag in
many countries, do not show any acceleration
yet. On a seasonally adjusted
basis, production has been flat to slightly
down over the last several months in
Japan, India, Korea, and Brazil. Any
reacceleration is either prospective or too
recent to be captured by the industrial
production data.
The biggest source of uncertainty
about the global economic outlook is
Europe. In the aggregate, the European
economy is doing better than expected
(so far) as strength in Germany, Sweden,
and Poland has offset weakness in
Greece, Portugal, Spain, and Ireland.
Easier monetary policy, to aid countries
affected by sovereign debt crises (Ireland
being the most current example) could
continue to boost growth in the healthier
economies. However, a spreading financial
crisis combined with fiscal consolidation
could ultimately slow growth
even in the stronger countries.
The good run of
economic data in
the United States,
particularly the
improvement in
leading indicators,
does not mean that
the U.S. economy
will now experience
the kind of strong
recovery that typically
follows a deep
recession; recovery
will remain sub-par.
It does mean that
the risk of falling
back into recession
has declined
and that growth is
likely to be stronger in 2011 than previously
thought. A temporary extension
of the Bush tax cuts, more likely now
than before the elections, would bolster
the case for stronger growth. But even
if growth throughout 2011 is no stronger
than previously expected, better-thanexpected
growth in the fourth quarter of
2010 will mean that forecasts for annual
growth rates in 2011 need to be revised
up. Nevertheless, annual growth is likely
to be no higher in the United States in
2011 than in 2010 and will be lower in
most of the world. Furthermore, even if
sequential (month-to-month, quarter-toquarter)
growth accelerates soon, yearover-year
growth is likely to slow into
the second quarter of next year before it
turns up again.
Copyright © 2010 E. I. du Pont de
Nemours and Company. All rights
reserved. Reprinted with permission.
Save the Dates
March Management
Meeting 2011
March 20-23, 2011
The Boulders Resort
Carefree, Arizona
AIMCAL
Index
Optimism Fades
With eight out of 10 indicators falling,
the Current General Activity Index
in AIMCAL’s Business Outlook Survey
plummeted 16 points to 45.85 in the third
quarter of 2010 from 61.70 at the end of
the second quarter of 2010.
On the bright side, the Number of
Employees and Capital Expenditures
indicators registered increases for the
quarter. In addition, even with the
decline in the Current General Activity
Index, it’s 10 points higher than it was at
the end of the third quarter in 2009.
Optimism about 2011 has slipped
three points since the six-month forcast at
the end of the second quarter of 2010 and
six points since the third quarter of 2009.
Although AIMCAL members scored six
out of 10 forecasted business indicators
positively, lower confidence in New
Orders, Delivery Time, Inventories and
Average Employee Work Week dragged
the Forecasted General Activity Index
down.
The third quarter 2010 survey
includes responses from 48 member
companies: 15 converters, 15 equipment
suppliers, 13 material suppliers and five
firms that participate in more than one of
the business segments. The full report is
available in the Members Only section of
the AIMCAL Website, www.aimcal.org.
GOT NEWS?
If your company has a
People On The Move
announcement or press
release for Member News,
send it via email to:
Tracey@AIMCAL.org
Please include the subject
line:
GOT NEWS?
10 Holiday 2010 www.aimcal.org