Every year OEM Off-Highway attends the NFPA's Economic Outlook Conference, and every year it is my favorite event. I'm somewhat of a self-proclaimed economics nerd, simply because I find the concept of monitoring thousands of data points and dozens of potential indicators to formulate what is otherwise an intelligent guess fascinating.
The message delivered this year was clear...don't expect too much out of the next two years. Several economists predict that there are approximately two to four quarters left before a global downturn. This will not be severe, as a clarification, but there is no growth anticipated until 2015. 2012 will level off; 2013 will be pretty stagnant; and 2014 will be slightly down. However, economists also see the proverbial light at the end of the tunnel with back to back years of positive economic growth starting around 2015 and continuing for several years.
As for the BRIC countries (Brazil, Russia, India, China), there are economic factors to consider. For the majority of economists who spoke at the NFPA's IEOC, if you haven't found a way to get into Brazil, it's probably too late to capitalize on their infrastructure boom, as it is currently underway to support the 2014 FIFA World Cup and the 2016 Olympics.
Russia continues to be difficult to establish business, though the country's leading indicator is trending down, so procede with caution if this is still a country you are pursuing.
India announced a recommitment to rebuilding its infrastructure, which is good news for U.S. companies looking to supplement business during the 2013 and 2014 downturn. However, India is notorious for its compliated government slowing down projects, so the speed of infrastructure development will be interesting to watch. Intersting to note, Canada actually has a larger GDP than India, but India is considered to have more untapped potential left in its economy that is unrealized and underutilized.
And finally, China. This year there were several revisions down from last year's numbers, as China's rapid economic growth and production was not able to be sustained, though they are still predicted to continue to grow. The Chinese have created too much capacity for production in their market and do not have an established export infrastructure to get rid of their product. This will probably lead to market consolidation, as there were quite a few recently established manufacturers to meet production demands.
Mining continues to look to be a strong market moving forward, and OEM Off-Highway is looking forward to investigating new releases and products at MINExpo 2012 in Las Vegas. Don't forget to follow @OEMOffHighway or @MaxtheMiner on Twitter to receive clues (through the hashtag #FindMax) as to where prize give-aways will be held at the show.
Come say hello at our MINExpo Booth #709!
Are you interested in participating in our upcoming October State of the Industry issue? Contact me at [email protected] and we'll set you up with questions to respond to!