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PUBLISHER'S VIEWPOINT
December 2007
The Worldwide Outlook For 2008
Up is good. We always prefer growth. And as we enter a new year, the worldwide market for foodservice equipment, supplies, furnishings and related products appears headed for another year of real growth in nearly every single major market.
That doesn't mean we all don't face challenges, especially here in North America. Anyone who reads a paper or sees a TV business program knows North America is entering 2008 with quite a bit of uncertainty. Problems in the housing sector, a credit crunch and high energy prices have cut into consumer spending and slowed sales of some, though not all, foodservice segments.
So it's no surprise that the general economic forecast for North America is for slower growth, at least in the first half of '08. For the equipment and supplies market, we'll see a similar slowdown. Our freshly revised FER E&S forecast now is for real growth of 1.5% and current-dollar growth of 5.9% in the coming year.
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"Another year of real growth in nearly every single major market"
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Both numbers are down slightly from our estimates of 1.9% real growth and 6.2% nominal growth for '07, which in turn is down from real market growth of 2.2% in '06 and 2.3 in '05, by our reckoning. Still, another year of positive E&S growth, a series going back to and including '03, is a good thing. (If you wish to purchase our complete forecast, drop me an e-mail at rashton@fermag.com.)
No one we know makes similar forecasts for the E&S market in the rest of the world. But with the help of a friend or two, and the forecasts for general economies around the world, we can make some guesses.
Europe did well in '07. Peter Backman of Horizons for Success, a U.K.-based consultant who tracks the market for E&S there, and keeps an eye on Europe in general, estimates the market grew about 1.5% during the past year, with nominal growth in the 4% to 5% range. Growth of gross domestic product was quite good by recent historical terms for most European economies in '07, according to Blue Chip Economic Indicators. In fact, a number of major European economies, including Germany and the U.K., are expected to post higher GDP growth rates than the United States in '07. And while Blue Chip forecasts slightly slower growth in '08 for Europe, Backman believes E&S market growth should be close to '07 levels.
Asia and the Middle East, meanwhile, continue to boom. Yum! Brands is on track to open a KFC a day in China in '07. Same-store growth rates for both McDonald's and Yum! have often crossed into double-digits in this region during the past year. Hotels are being built and opened at record rates, not just in China, but in Dubai and India and many other areas. The outlook is for more of the same in '08.
With so much happening all around the world, we hope you find our 2008 Worldwide Buyers Guide useful, and we wish all of you a prosperous and healthy year.
Cheers,
Robin Ashton
Publisher
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