August 02, 2013
We released our forecasts for growth of the foodservice equipment and supplies market last month during Foodservice Equipment Reportsí annual Presidentís Preview E&S Market Forecast meeting. To cut to the chase, we expect E&S market growth to accelerate in the second half of this year and into 2014, peaking in 2015 before starting to slow again in 2016 and '17.
Because of the weak first half this year, we forecast current dollar growth of only 3.3% in 2013 with real growth of 1.5%. Our forecast for '14 is 4.1% nominal and 2.1% real.
For us in foodservice and foodservice E&S, the next few years look pretty good. But there are worrisome issues out there. Weíve been reading a lot of experts who are very, very concerned about the longer-term outlook during the next few decades. The structural challenges of employment, demographics and the like facing not just the U.S. and Canada, but all the developed economies, have become important factors in most prognosticatorsí longer-term growth outlooks.
It comes down to two problems. One involves employment or rather employability. Our machines are making us so productive, the need for labor inputs, particularly labor inputs from moderately or poorly educated folks, is diminishing. Most of us are aware of the loss of jobs in manufacturing over the past 30 years and in construction since the housing and retail bubbles burst, initiating the Great Recession.
But we heard a report last week based on a study by the Bureau of Labor Statistics thatís equally scary. Since the beginning of the recession, and accelerating after the recession was technically over, some 2 million office and clerical workers have lost their jobs. These jobs are mostly not coming back. We have now learned to get by without assistants, secretarial help and a whole range of so-called white-collar functions. Just what are all these people going to do for a living? If they canít make one, they canít afford foodservice.
The other problem is and has been demographics. Weíre back to the ever-constant issue of The Baby Boom population bubble and its impact on social welfare support costs. Whatís tough here is the political difficulty in nearly every developed economy in the world to take things away that have been promised to a very big group of people who vote. Anyone paying attention knows that weíve known about this problem for three decades and still mostly havenít done anything about it.
There are no easy solutions to these challenges, other than to say what one gets, one ultimately has to pay for and that, in the end, weíre all responsible for understanding the issues and working to fi x them. All of us who make our living from foodservice need consumers with enough disposable income to use foodservice.
Iím nearly always an optimist, but I also keep my eyes open wide. Human beings are pretty resourceful, but sometimes they need to be pushed against a wall before they act. And since most of us have been living in the best time in the best place in the history of humanity, I like to keep it all in perspective. One of our jobs is to try to keep the good times going.