Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
January 25, 2005

Regulatory Report:
Sponsored by: APW Wyott Innovations

Connecticut Operators Bristle At Proposed FOG Regs
Houston, We’ve Got Handhelds
Water World? Not Anymore, Report Says
Surfing For Food Safety, Part 1
Socal Gas Fuels Seminar Series

Industry Report:
Sponsored by: Manitowoc Foodservice Group

McDonald’s Mourns Bell
FER To Sponsor New Dealer, Industry Service Awards
Ready, Set…Go To The NAFEM Show
One Big Arby’s Family? Stay Tuned…
Save the Date, Date, Date, Date. …
Clark National Expands Into South Florida
MAFSI Announces Award Winners, 2005 Officers

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In This Section:
Blue Chip I: Economists Optimistic About 2005
Blue Chip II: Consensus Takes First Gander At 2006, Sees Continued Growth
Blue Chip III: Growth Slows in Europe, Will Moderate In Asia

This issue's Regulatory ReportSponsor: APW Wyott Innovations Industry ReportSponsor: Manitowoc Foodservice Group

Industry Report Sponsored byAtlas Metal Industries Inc.

Blue Chip I:
Economists Optimistic About 2005
While overall growth will slow in 2005, economists polled by Blue Chip Economic Indicators expect "another pretty good year for the American economy," according to Blue Chip Executive Editor Randall Moore.

The consensus forecast for real growth of gross domestic product year-over-year actually rose in the January survey, up to 3.6% from the 3.5% forecast the previous three months. Estimates for ’04 real GDP growth are 4.4%.

The economists see solid growth in both personal consumption and business spending, though both measures are expected to grow slightly more slowly than they did last year. The overall consumer inflation rate is also forecast to moderate, as energy prices moderate, to 2.5%, from 2.7% in ’04.

The economists believe the Federal Reserve will continue to raise interest rates at a "measured" pace, with the core rate rising 1.5 points to 3.5% by year end.

These macroeconomic forecasts are very much in line with Foodservice Equipment Reports’ assumptions for ’05. As a result, the magazine—and FER Fortnightly--see no reason to change our forecast for E&S manufacturers’ sales growth in ’05. The forecast currently stands at 3.3% real and 8.0% nominal.


Section sponsored by Atlas Metal Industries Inc.

Blue Chip II:
Consensus Takes First Gander At 2006, Sees Continued U.S. Growth
Economists polled by Blue Chip Economic Indicators forecast real growth of U.S. gross domestic product will remain above trend in 2006. Their consensus forecast in the January survey: 3.4%. This compares with 3.6% forecast for this year and estimated growth of 4.4% in ’04.

Consumer inflation is expected to slow slightly, to 2.3%, while interest rates also will grow more slowly with the Federal Funds rate reaching 4% by the end of ’06.

Section sponsored by Atlas Metal Industries Inc.

Blue Chip III:
Growth Slows in Europe, Will Moderate In Asia
Major European economies struggled in the third and fourth quarters of 2004, as a double-whammy of high oil prices and a strong Euro cut into both consumer spending and export growth, according to Blue Chip Economic Indicators. Growth was nearly flat in Europe’s two largest economies, Germany and France, in the second half of ’04.

Overall, the Blue Chip consensus expects GDP growth of 1.8% for ’05 in the EuroZone, matching estimated growth in ’04. The U.K., Germany, France and Belgium are all forecast to post slightly slower GDP growth rates this year than last.

Growth is also expected to slow in Asia, though on the heels of a very robust ’04. China’s superheated economy is forecast to grow 7.9% this year, compared to an estimated 9.2% in ’04. Japan, which showed signs of strong growth early last year, has cooled down quickly. The forecast this year is for 1.8% GDP growth, down from 4.1% last year. South Korea, Singapore, Taiwan and Hong Kong are all forecast to post more moderate growth, though still in the 4-5% range.

Brazil, which had strong growth of 4.6% last year, is predicted to growth a still above-trend 3.7% this year, according to the group.

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