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 Report Sponsor: APW Wyott Innovations | Industry ReportSponsor: Manitowoc Foodservice Group
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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.
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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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