Ciao China

China, the global market, and OEM's two analysts.

I have always loved economics, and in college even took a few classes just for fun. Yes, I'm that guy. It's interesting to watch the ebb and flow of markets, watch consumer spending and business investments spike and plummet, and find the culprits that cause these fluctuations.

While it isn't always fun to ride the economic rollercoaster, seeing the trends and using recorded data to make an informed prediction of where a sector is heading is amazing.

OEM Off-Highway is lucky to have two people watching the world market for us. Our long-time Economist Steven Crane consistently delivers our most popular section of the magazine, our Economic Outlook (page 8).

Recently the magazine added Frank Manfredi, our market forecaster. He spends countless hours with equipment manufacturers around the globe to find out what trends they are seeing from their up-close-and-personal perspective, and travels to trade shows and other industry events to keep a close eye and ear to the equipment industry’s hems and haws.

This issue, Frank reports on the Chinese market, as well as brings back data gathered while attending bauma China 2010 in Shanghai (see page 24). China has been the talk of economics and industry for a long time, as we watched it strength grow and develop as the next world superpower. Equipment manufacturers have taken advantage of China’s blossoming marketplace and cheaper labor costs and set up manufacturing and assembly facilities.

But while all eyes may seem to be on China, other countries and regions have begun to rise to the service for investment and expansion. Latin America has been noted as the most confident, with the region leading the way in business optimism according to a global survey of 5,700 senior executives conducted by Grant Thornton Intl. Ltd.

Across Latin America, 78% of business executives are optimistic about their region’s economic performance in 2011. Elsewhere, optimism in Europe is at 50%, while in North America it is just 44%, with the Asia Pacific region the least optimistic region at 40%.

Within Latin America, Chile (95%) scored the highest optimism of any country surveyed, followed by Brazil (80%), Argentina (75%) and Mexico (71%). In the U.S., optimism is at 40%.

Interestingly, the survey found business optimism in China to be waning.

Levels of business optimism in mainland China have taken a dramatic fall over the past 12 months. Only 53% of businesses are now optimistic about the outlook for the coming year, compared with 68% last year. This represents one of the largest negative swings in Grant Thornton’s 2011 International Business Report (IBR).

In recent news, Parker Hannifin acquired HDA in Brazil to expand its presence in the Latin American hydraulic filtration market, and Titan Tire purchases Goodyear's Latin American Farm Tire Business, also based in Brazil.

I'm keeping my eye on Latin America, and let me know what you hear and have heard about emerging economies! Also remember you can go online to to check out the latest Economic Outlook data, and sign up for our Economic Outlook e-Newsletter.