The MHEDA Journal - First Quarter, 2013 - (Page 30)

FORECAST The Economic Outlook: Moderate Growth Against Headwinds CAUTIOUS OPTIMISM ECONOMIC T he coming year is likely to see moderate, but not rapid growth. However, this forecast is jeopardized by a number of sources of uncertainty that could result in another disappointing year, similar to 2012. a mortgage. Retail sales, which had declined throughout the second quarter of this year, have now rebounded, rising by 1.2 and 1.1 percent in August and September, respectively. The Federal Reserve has pledged to pursue an accommodative policy until either unemployment declines Here is why. The economy remains weak. Economic performance over the past two years has been disappointing. After emerging from the recession, real GDP grew 2.4 percent in 2010, but this was followed by an anemic 1.8 percent the following year. Performance was not been any better in 2012 (See Chart 1). Recent history has been kinder for the material handling equipment industry, which has enjoyed a sustained recovery. Since at least mid2012, the industry has seen a steady rise in new orders and shipments. The relatively high level of unfilled orders, especially compared to inventories, promises continued strong business absent a major jolt to the economy. Yet even this growth has slowed over the last six months (See Chart 2). There has been promising news on other fronts as well. Job creation has averaged 173,000 over the last four months ending in October, lowering the unemployment rate to 7.9 percent. However, the labor force participation rate is 63.8 percent, well below its high 30 Change in Real GDP and Investment Annual Percentage Change 20 10 0 GDP -10 -20 -30 -40 2004 2005 2006 2007 Gross Private Domestic Investment in Equipment and Software Year 2008 2009 2010 2011 2012 Source: Bureau of Economic Analysis Chart 1 of 66.4 percent at the beginning of 2007. This implies a loss of more than 4 million workers from the economy. In September housing starts rose 15 percent to the highest levels in four years. Housing seems to have hit a bottom and rebuilding in the Northeast should strengthen it even further. But the pace of recovery will continue to be constrained by the long backload of foreclosures in certain markets and the difficulty that all but the best individuals have in getting qualifying for significantly or inflation rises above its comfort levels. There is little sign that the latter will occur anytime soon. In addition to stating its intention to hold interest rates at exceptionally low levels through mid-2015, the Fed plans to purchase an additional $40 billion in mortgage-backed securities every month. As a result of these trends, few observers think that the economy is in danger of tipping back into recession on its own. The more difficult 30 MHEDA |

Table of Contents for the Digital Edition of The MHEDA Journal - First Quarter, 2013

President’s Perspective
From the Desk of Liz Richards
Ask Your Board
Member Profile
MHEDA Member Profile
At Work
2013 Industry Forecast
Distributors Forecast
Suppliers Forecast
MHEDA Members Exhibit at ProMat
MHIA Expects Slow Growth in 2013
Modest Growth for Industrial Trucks Sector
Cautious Optimism in Conveyor Industry
Get Your Game On
New Members
Spotlight on Association News
MHEDA University Calendar
MHEDA Milestones
New Products
Index of Advertisers by Product Category

The MHEDA Journal - First Quarter, 2013