1
“Make Your Move”
Presented by
ITR
® Alan Beaulieu
January 2012
www.itreconomics.c
om
RESULTS FOR 2011
F Date
Forecast
Actual
GDP
6/10
$13.525 T (3Q)
$13.332 Trillion (3Q)
USIP
1/11
93.1 *
93.5 (through Nov)
EU IP
1/11
101.1 *
101.3 (through Oct)
Retail Sales
6/10
$2.116 Trillion
$2.102 (through Nov)
Housing
7/10
579 Th Units
596 (through Nov)
Employment
4/10
141.1 million
139.9 (through Dec)
CPI
7/10
2.9%
3.0% (through Nov)
* End of year 12‐month index estimate
3
US Industrial Production to Gross Domestic Product
Year-over-year Quarter to Quarter (3/12)
12
12
8
8
4
4
0
0
-4
-4
-8
-8
-12
-12
GDP
US IP
-16
-16
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
4
US Industrial Production to Wholesale Trade Durable Goods
12/12 Rates-of-Change
US IP
15
Wholesale
24
10
16
5
8
0
0
-5
-8
-10
-16
US IP
Wholesale
-15
'94
'96
-24
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
US Industrial Production to Wholesale Trade Nondurable Goods
5
12/12 Rates-of-Change
US IP
10
Wholesale
20
5
10
0
0
-5
-10
-10
-20
US IP
Wholesale
-15
'94
'96
-30
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
6
Recovery
•
•
•
•
•
•
•
Leading indicators pointing up
Liquidity is not an issue
Exports are up
Stimulative monetary policy
Employment rising (companies right-sized)
Banks are lending
Normal seasonal rise in Retail Sales
www.itreconomics.com
Corporate Profits – 3rd Quarter
7
Billions of $
$448.7
$494.7
Financial
$401.8
Manufacturing
$125.2
$110.6
$122.6
$106.0
Retail trade
$97.1
$87.7
$81.2
Information
$85.6
$85.8
$83.3
Wholesale trade
$10.7
$25.0
$22.2
Utilities
2011 (3Q SAAR)
2010
$33.5
$34.4
$23.5
Transportation
and warehousing
$0
Source: BEA
$268.2
$217.1
$100
2009
$200
$300
$400
$500
$600
www.itreconomics.com
8
Recession in 2012
•
•
•
•
•
Europe’s financial troubles might…
China’s housing/inflation bubble could…
International banking crisis becomes…
Oil prices could break through $120 …
USD could lose all credibility causing…
www.itreconomics.com
9
Total U.S. Public Debt
(% of GDP)
140
140
120.0%
120
120
100
100
80
80
60
60
40
40
20
20
0
1920
0
1930
1940
1950
1960
1970
1980
1990
2000
2010
www.itreconomics.com
Annual US Industrial Production
10
12MMA Index, 2007=100
105
100
95
90
85
80
75
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
www.itreconomics.com
Phase 1 – Data Preparation
3/12
Raw
Jan‐10
3MMT
12MMT
12/12
3/12 Rate‐of‐Change
1.4
Feb‐10
1.5
Mar‐10
1.5
Apr‐10
1.4
May‐10
1.5
Jun‐10
1.3
Jul‐10
1.3
Aug‐10
1.6
Sep‐10
1.6
Oct‐10
1.5
Nov‐10
1.7
Dec‐10
1.6
Jan‐11
1.7
Feb 11
17
4.4
4.4
4.4
4.2
4.2
4.3
4.6
4.8
4.8
4.8
4.9
4.9
5.0
5.0
5.0
4.9
4.7
4.9
5.1
5.3
5.3
5.3
= =
14.1%
13.6%
13.2%
15.1%
13.5%
14.1%
11.3%
18.0
18.3
18.5
18.6
18.8
19.0
19.2
19.4
19.6
19.8
20.0
20.1
20.3
.
.
100
100
100
100
10.5%
12/12 Rate‐of‐Change
= =
12.7%
.
.
100
100
100
12.7%
100
Phase 2 – Accumulate the Inputs
Sales
Indicator
15
60
40
10
20
5
0
0
‐5
‐20
Sales
Indicator
‐40
‐10
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Phase 3 – Generate the Quantitative Forecast
Internal Trends
Leading Economic Indicators
ITR Long Term Business Cycle Theory
News and Market Observations
Output ‐ Deliverables
Applicable Advice
Accurate Forecasts
RESULTS FOR 2011
F Date
Forecast
Actual
GDP
6/10
2.0%
2.9% (with normal 4Q)
USIP
1/11
93.1 (12MMA)
93.5 (through Nov)
EU IP
1/11
101.1 (12MMA)
101.3 (through Oct)
Retail Sales
6/10
$2.116 T
$2.102 (through Nov)
Housing
7/10
579 Th Units
596 (through Nov)
Employment
4/10
141.1 million
139.9 (through Dec)
CPI
7/10
2.9%
3.0% (through Nov)
16
Global Industrial Production Indices
12/12 Rates-of-Change
20
20
5.0 SE Asia
4.1 Europe
4.1 US
4.0 Mexico
10
0.6
0
10
Brazil
-2.7
0
Japan
-10
-10
-20
-20
-30
-30
'00
'02
'04
'06
'08
'10
'12
ITR Trends Report
'14
www.itreconomics.com
17
Employment – Private Sector
Annual Data Trend
120
120
115
115
110
110
105
105
100
100
95
95
90
90
Employment Mils of Jobs
85
85
'92
ITR Trends Report
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
18
Copper Futures Prices
Cents per Pound
R-O-C
200
MMA
1200
150
1050
3/12
100
900
12/12
50
750
16.2
0
600
-11.4
-50
450
402.2
-100
300
3MMA
12MMA
-150
150
-200
0
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
ITR Trends Report
'14
www.itreconomics.com
19
Crude Oil Futures Prices
Light & Sweet $ per Barrel
R-O-C
200
MMA
360
100
280
3/12
12/12
Sep '10
21.3
13.8
0
200
Sep '09
-100
120
Sep '08
97.0
3MMA
12MMA
Sep '09
-200
40
-300
-40
'92
ITR Trends Report
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
20
Consumer Price Index to Crude Oil Futures Prices
12/12 Rates-of-Change
CPI
5
OIL
250
4
200
3
150
2
100
1
50
0
0
CPI
OIL
-1
-50
'92
'94
ITR Trends Report
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
21
Managing Inflationary Pressures
•
•
•
•
•
•
•
•
•
•
•
•
•
Phase B… raise prices (as justified)
Consider real cost of living vs. nominal CPI
Highlight quality, content, service ~ competitive advantage
Borrow now – fixed as long as possible
• Inflation favors debtors
• Purchase land/property – leasing rises with inflation
• Build in efficiencies for long-term cost savings
Lower fixed costs ~ increase variable costs for increased flexibility
Re-assess domestic sources (inflation will be imported)
Rigorous cost controls – hire the best accountant/CFO
R & D ~ substitute products and materials
Move liquid assets off shore
Hire now and/or lock in labor rates
Select price indices that magnify inflation negotiating with customers
Select price indices that minimize inflation negotiating with vendors
• Get Vendors to agree to longer-term price commitments
Sell overseas
www.itreconomics.com
22
Trends 10
Wholesale Trade
New Orders
Production
Prices
Foreign
B
Retail
Financial
Medical
C
Housing
Soft Landing
Nonresidential
Construction
A
D
Hard Landing
ITR Trends Report
www.itreconomics.com
Wholesale Trade Petroleum & Petroleum Products to
Crude Oil Futures Prices
23
12/12 Rates-of-Change
Petroleum
75
Oil
90
50
60
25
30
0
0
-25
-30
Petroleum
Goods
-50
-60
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
US Industrial Production to
Wholesale Trade Machinery, Equipment & Supplies
24
12/12 Rates-of-Change
US IP
18
Wholesale
30
12
20
6
10
0
0
-10
-6
-12
-20
US IP
Wholesale
-30
-18
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
US Industrial Production to
Wholesale Trade Chemicals & Allied Products
25
12/12 Rates-of-Change
US IP
15
Wholesale
30
10
20
5
10
0
0
-5
-10
-10
-20
US IP
Wholesale
-15
'94
'96
-30
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
US Industrial Production to
Machinery, Equipment & Supplies Wholesale Trade
26
12/12 Rates-of-Change
Wholesale Trade
30
US IP
15
20
10
10
5
0
0
-10
-5
-20
-10
Wholesale Trade
US IP
-30
'94
'96
'98
-15
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
27
Wholesale Trade Electrical & Electronic Goods
Bils of $
R-O-C
30
MMA
730
12/12
3/12
15
630
10.3
7.9
0
530
-15
430
398.302
-30
330
3MMT
12MMT
-45
230
-60
130
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
28
US Industrial Production to
Wholesale Trade Hardware & HVAC Equipment & Supplies
12/12 Rates-of-Change
Wholesale
30
US IP
15
20
10
10
5
0
0
-10
-5
-20
-10
Wholesale
US IP
-30
'94
-15
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
29
Nondefense Capital Goods New Orders w/o Aircraft
Billions of $
R-O-C
40
MMT
1600
3/12
20
Feb '11
12/12
1400
11.3
8.1
0
1200
-20
1000
Oct '09
Jul '08
-40
$792.1
12MMT
800
3MMT
-60
600
Nov '09
-80
400
'92
'94
ITR Trends Report
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
30
Ratio of Inventories to New Orders
Raw Data
1.1
1.1
Dec '10
1.006
1.0
1.0
0.9
0.9
Dec '09
RIO
0.8
0.8
'06
'07
'08
'09
'10
'11
'12
'13
'14
www.itreconomics.com
31
Purchasing Managers Index
Raw Data
70
70
65
65
60
60
55
55
50
50
45
45
40
40
35
35
Raw
30
30
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
32
US Leading Indicator
1996 = 100
R-O-C
12
MMA
155
Oct '10
1/12
12/12
6
5.9
5.4
140
Jun ‘11
125
0
115.0
-6
110
Aug '07
Jun '09
-12
95
Actual
12MMA
-18
80
65
-24
'94
'96
'98
'00
'02
'04
'06
'08
'10
ITR Trends Report
'12
'14
www.itreconomics.com
33
Stock Prices Index
S&P 500, 1941-43 = 10
R-O-C
MMA
4200
60
1/12
12/12
Oct '10
30
3400
13.3
0.0
0
2600
Apr '11
-30
1800
Dec '07
Actual
-60
1280.8
1000
12MMA
Sep '09
200
-90
'94
'96
ITR Trends Report
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
34
Retail Sales Excluding Automobiles
Trillions of 82-84$
R-O-C
MMT
14
4.75
12/12
3/12
7
4.00
Feb '11
2.1
1.4
0
3.25
Jul '09
-7
2.50
Nov '07
$2.103
3MMT 12MMT
-14
Jan '10
1.75
-21
1.00
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
ITR Trends Report
'14
www.itreconomics.com
35
Housing Starts
Millions of Units
R-O-C
MMT
30
4.2
3/12
12/12
17.8
15
3.7
Nov '10
1.5
0
3.2
May ‘11
-15
2.7
Mar '06
-30
2.2
3MMT 12MMT
-45
1.7
-60
1.2
-75
0.7
0.599
Dec '09
-90
'94
ITR Trends Report
'96
'98
'00
'02
'04
'06
'08
'10
0.2
'12
'14
www.itreconomics.com
US Industrial Production to Private Non-Residential Construction
36
12/12 Rates-of-Change
Construction
30
US IP
12
20
8
10
4
0
0
-10
-4
-20
-8
-30
-12
Private Construction
US IP
-40
-16
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
ITR Trends Report
'10
'12
'14
www.itreconomics.com
37
Commercial Buildings Construction
Billions of $
R-O-C
30
3/12
MMT
190
Jan '08
12/12
15
170
13.0
4.2
0
150
-15
130
-30
110
Apr '08
-45
90
Apr '10
-60
3MMT
12MMT
70
-75
50
39.8
-90
30
Apr '11
-105
10
'94
ITR Trends Report
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
www.itreconomics.com
38
Four Phases
www.itreconomics.com
Phase Management ObjectivesTM:
39
Phase Late A – Recovery
1. Positive leadership modeling (culture turns to behavior)
2. Add Sales Staff and Hire Top People 3. Training programs
4. Plans to increase prices
5. Invest in customer market research (know what they value)
6. Judiciously expand credit
7. Check distributions systems for readiness to accommodate increased activity
8. Review and uncover competitive advantages
9. Improve efficiencies with investment in technology and software
10. Spend $ on new products, marketing, advertising
11. Work on “what’s next”
ITR Trends Report
www.itreconomics.com
40
Find a way to business in the “countercyclical” or largely unaffected areas:
Energy
Green
Water
Canada/Exports
Higher Education
Health Care
Practices
Food
Pets
Funeral Services
Alcohol
Security
Legal Services
(Diversified)
www.itreconomics.com
41
7 Must Watch Items
Money Supply
Corporate Bonds Rate-of-Change
US Leading Indicator
Purchasing Managers Index
Retail Sales
Employment
Nondefense Capital Goods New Orders
Available from ITR via ITR Trends Report,
the ITR Advisor, or on the web
www.itreconomics.com
The Road Ahead
42
(actual results may vary…stay tuned!)
2011
Slower rate of recovery
2012
Ongoing recovery
2013
Flattens out; recession begins
2014 Recession
2015
Growth
2016
Growth
2017
Growth
www.itreconomics.com
Continue Your Quest in Seeing Tomorrow Today
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•
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Delivered Monthly
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Subject: “Alan is Cool”
With your contact information
Institute for Trend Research
A sample of what you will learn
•
Alan Beaulieu provides
economic forecasts with 96%
accuracy so companies can
improve their performance and
profits.
•
•
•
•
•
Rave Reviews
Short-term and long-term economic forecasts
(U.S. and /or abroad).
How those forecasts impact your company.
Is the economy going to grow?
What about inflation?
How will the U.S. be affected by corporate
production facilities being moved overseas?
Republican or Democrat - what impact does
each type of administration have on the
economy?
Does the stock market give us a true reading of
the economy?
What leading economic indicators should we be
watching for?
See the future first before your competition
does!
“Alan has been presenting to us once a year for nine
years. We bring him back yearly because he does
such an outstanding job. He prepares interesting
slides and charts and gives us an overall view of
where the economy is going. Then he ties it in to
our business.”
Alexander Ma
American Honda Motor Co.
•
“I was at the ACG meeting in St. Louis this past
Friday where you presented…your program was
really fantastic…thank you for an honest (and very
well documented and intelligent!) and encouraging
presentation…you truly inspired me.”
Kevin Miquelon, President
Pfoodman Holdings, LLC
One of the country’s most informed economists,
Alan Beaulieu is a principal of the ITR® where he
serves as President. He is co-author of “Make Your
Move”, a book on how to increase profits through
business cycle changes. Alan is a principal and
Managing Partner of ITR Capital Partners and is an
active member of its Investment Committee. Alan
is also the Senior Economic Advisor to the NAW
and the Chief Economist for HARDI. And, most
recently, Alan is the host of Make Your Move, a
business radio talk show heard Monday
afternoons on the VoiceAmerica™ and World
Talk Radio™ Networks.
“The lessons and strategies you shared as part of the
Strategies for a Tough Economy panel were of
enormous value to the more than 700 entrepreneurs
and small business partners in attendance.”
Mark Herlyn
Vice President, Advertising
The New York Times
“Your economic outlook was clear, concise,
professional, thought-provoking, and entertaining,
giving all of us information to assist us in economic
planning for both our personal and professional
lives”
Gregory Bocchi
Executive Director
Powder Coating Institute
“I was in the audience -- mouth wide open, jaw
dropped -- listening to your entertaining, inspiring
and surprising economic reflections yesterday Thank
you for giving such a candid and intelligent take on
the recovery and what it will take to be successful in
the next few years.”
Lida Citroën
LIDA360, LLC
•
•
About Alan
Mr. Beaulieu has been providing workshops and
economic analysis seminars in 5 countries to literally
thousands of business owners and executives for the
last 20 years.
Pronouncements from the Institute for Trend
Research and/or Mr. Beaulieu have appeared in/on:
the Wall Street Journal, New York Times,USA
Today, Knight Ridder News Services, Business
Week, Associated Press, The Washington Times,
CBS Radio, CNN Radio, Sirius talk radio, KABC,
NPR affiliate WLRN and numerous other outlets.
To book an engagement call:
166 King Street
Boscawen, NH 03303
(603) 796-2500
[email protected]
www.itreconomics.com
Services provided by ITR®
ITR’s mission is to provide accurate, objective analysis of entire economies and specific markets in order to
assist American and International companies with timely and effective business decisions. A brief description
of our services follows.
ITR Trends Report
Trends, forecasts, analysis, charts, and text for the
US, major foreign economies, and specific markets,
commodities and exchange rates are provided
monthly via the ITR Trends Report.
Want to see where a trend is taking us? You will
through the ITR Trends Report. When will the
trend turn, how high is high, and how low is low are
some of the questions answered each month for a
plethora of economic factors.
Asking an analyst about what you are seeing or
what it all means and getting an answer in real time
is an innovative feature of the ITR Trends Report.
If you need the data behind the trends, you can
access that directly too. An annual subscription to
the ITR Trends Report is $895.00.
Consulting Services: ITR provides a variety of
consulting services from quarterly company and
market reports to due diligence reports to company
and market/industry forecasts.
A quarterly report is client specific and crafted
based on the needs of the company or association
ordering it. They include a macroeconomic
overview and a 3-year forecast of Industrial
Production plus as many industry breakdown and
forecasts as requested.
We offer 3-year company forecasts which give you
revenue estimates quarter by quarter. These are
delivered as excel files and can be updated for years
to come. A phone consultation with your
management team is also included in the price of
$4800.00.
Trendcast is a process by which we show you
where your company is in the business cycle, where
revenues are headed, and which indicators are
important to your company. If you know what
conditions your company is going to be facing next
year, you can make changes now in order to
maximize your revenues and/or profits. We provide
tried and true Management Objectives™ to fit your
business cycle so you are hiring or making cuts,
making capital expenditures, or borrowing money,
at the most effective time.
Speaking Engagements: We have extensive
experience and have received superlative reviews
giving keynote speeches on economic trends and
our projection of those trends. We also address
smaller groups where the topics discussed are
tailored to the audience during which participation
is encouraged. ITR speaks over 250 times a year to
various companies, associations, and leadership
gatherings. We provide these entertaining,
insightful, and relevant talks across North America
and abroad. To schedule a speaker or learn more,
call Erin Hennigar at 603-796-2500.
We take your company’s sales data history, convert
it into a rate-of-change format, chart the data
against leading indicators and U.S. market
indicators, analyze the results, and present you with
your own company charts, giving you a view of the
future. We determine which indicators lead your
business and by how many months. A follow-up
phone consultation is included. We make it easy to
keep the charts current from our website. A
Trendcast costs $4500.00. To schedule a Trendcast,
please call Kimberly at 603-796-2500.
The ITR Advisor is a concise, non-technical
overview report provided each month to
subscribers. It is our answer to requests for a
presentation update that we constantly receive. The
ITR Advisor is ideal for decision makers that have
heard an ITR presentation and want to quickly and
easily keep up with our thinking and analysis and
general economic forecast. At two pages each
month, we bring you what you need to know to
effectively manage the future. An annual
subscription to the ITR Advisor is $199.00.
First in Forecasts since 1948
ITR® Trends Report Order Form
The ITR® Trends Report provides a valuable means of staying on top of the economy.
The report consists of:
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In-depth, 60-plus page economic report
Covers 48 market sectors both national and international
Long-term views for key market sectors
Detailed forecasts
Executive summary
"Trends Report at a Glance" summary
Management notes with action suggestions
Multiple follow-ups via phone with ITR analysts
Delivered monthly via electronic medium to subscribers
An annual subscription to the ITR® Trends Report is $895.00.
You can log on to www.itreconomics.com, call Kimberly at 603-796-2500,
fax 603-796-2511 or email us at [email protected] to get started today.
ITR® accepts MasterCard, Visa and American Express.
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Reproduction of the material contained in this handout in whole or part is forbidden without written permission granted by ITR .
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