The 2020 Mid-Year Economic Update_long

Day: November 18, 2008

Energy Goods Push Down Wholesale Prices

Wholesale prices fell 2.8% in October, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported . This decrease followed a 0.4-percent decline in September and a 0.9-percent fall in August. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved down 3.9% in October after declining 1.2% in September, and the crude goods index dropped 18.6% subsequent to a 7.9-percent decrease in the previous month.
Among finished goods in October, prices for energy goods fell 12.8% compared with a 2.9-percent decline a month earlier. The index for consumer foods edged down 0.2% following a 0.2-percent increase in the prior month. Prices for goods other than foods and energy rose 0.4% for the second ...

Home Depot Sales Drop 6% for 3Q

The Home Depot, Atlanta, GA, a home improvement retailer, reported sales for the third quarter ended Nov. 2, 2008, totaled $17.8 billion, a 6.2% decrease from the third quarter of fiscal 2007. Profit was $756 million, a decline of 31% from the same period a year ago.
The reduction in sales reflected negative comparable store sales of 8.3%, which was partially offset by new store sales.
The housing and home improvement markets remain challenging. Across our entire business, we are making the adjustments necessary to respond to a tough market environment," said Frank Blake, CEO.
For the first nine months of the fiscal year, sales dropped 5% from the prior year to $56.7 billion. Profit was $2.3 billion, down ...

Wolseley Profit Declines 30% in 1Q

UK-based Wolseley plc, distributor of plumbing and heating products and building materials, reported group sales for the three months ended Oct. 31, 2008, were up 2% from the same period a year ago. Profit was down about 30%.
Results continue to be impacted by the events in the financial markets and weakness in the housing markets. The decline in profit was primarily due to lower profitability in Stock Building Supply and Wolseley UK.
While these results reflect a further deterioration in the business environment in the first quarter it was not unexpected, and, we continue to react swiftly to market conditions with aggressive but measured cost reduction,"said Chip Hornsby, group chief executive. "In these unprecedented circumstances, the key priorities remain ...

Two-Thirds of Industrial Manufacturers ‘Pessimistic’ Over U.S. Economy

Two-thirds of U.S.-based industrial manufacturers are pessimistic about the U.S. economy over the next 12 months, according to the third-quarter edition of the PricewaterhouseCoopers LLP Manufacturing Barometer. Ninety percent of survey respondents believe that the U.S. economy declined in the third quarter, up 13 points over last quarter and a 70 point increase from those who felt negative about the U.S. economy the same time last year.
As for international prospects, the majority of industrial manufacturers (80%) believe that the global economy declined -only 13% view the world economy as growing, which is a fraction of the 81% who believed it was growing last year. Of those manufacturers who market their products abroad, 63% are worried about the prospects of the ...

Canadian Manufacturing Sales Edge Up in September

Canadian manufacturing sales edged up 0.1% to $52.2 billion in September after a sizeable 3.7% decrease in August.
However, measured in constant dollars, manufacturing sales rose 0.7% compared with August as a result of decreasing industrial product prices. The constant dollar measurement takes price fluctuations into account, providing an indicator of the volume of sales during the month. The constant dollar gain in September followed a notable 4.0% decrease in August.
At the industry level, 13 of 21 manufacturing industries increased in September.
By Sector
The transportation equipment industry (+1.1%) reported the largest gain in September, increasing for the fourth time in five months. ...

MAPI Report: U.S. Economy in Recession

The U.S. economy is in the midst of a severe recession and will face serious challenges through 2009, according to a new report.
The Manufacturers Alliance/MAPI Quarterly Economic Forecast says that inflation-adjusted GDP growth decelerated to 1.4% in 2008 and will decline 1% in 2009. The 2009 GDP forecast is down from 1.3% growth projected in MAPI's previous quarterly report in August.
Manufacturing production growth will sink into negative territory in 2008, declining 1.4% following an already low 1.7% growth in 2007. It is likely to fall further in 2009, declining by a significant 4.2%. The previous quarterly MAPI report had forecast production to decline by 0.5% in 2008 and to grow by 1.6% next year.
Production in ...

A History of Recessions

For most of us, a recession would not be a new experience," says Rick Peterson, outgoing president of the Specialty Tool and Fasteners Distributor Association (STAFDA). Peterson was speaking at the STAFDA's annual trade show and conference November in Denver, CO.
He cited historical statistics in his speech: 10 recessions since World War II, on average lasting 10 months each, a peak unemployment rate of 7.6% and a decline of gross domestic product (GDP) of 1.8%. The two worst modern recessions, he says, were those of 1973-1975 and 1981-1982. In those, unemployment reached 9% and 10%. "History tells us recessions are frequent and short-lived before the business cycle self-corrects and prosperity returns," Peterson says.
The chief economist for the Manufacturers ...

Foodservice Distributor McLane Co. Acquires McCarty-Hull

Foodservice distributor McLane Co. has acquired Amarillo, TX-based distributor McCarty-Hull.
McCarty-Hull has sales of about $100 million in grocery, tobacco and other products to convenience and grocery stores in four states.
McLane has annual sales of $24 billion and is owned by Berkshire ...

HD Supply CEO: Slowing Infrastructure Sector Won’t Fall Far

Distributors focused on residential construction markets have had to find ways to adapt to the relatively nonexistent new housing market over the past year. Joe DeAngelo, CEO of HD Supply, told me in a recent interview that he credits his company's exposure to diverse markets as reason it's managed to stay afloat in current conditions.
But those diverse markets are starting to feel the pinch, as well. Infrastructure projects, which DeAngelo refers to as having endless critical demand,"are starting to fall off. According to a recent article in the Wall Street Journal, cash-strapped cities like Philadelphia, Phoenix and Atlanta are requesting money from the federal bailout plan to help fund ...