In This Section:
Special Report: Publisher's Revised 2005 E&S Market Growth And First Guess For 2006
Stainless Steel, Other Commodities Prices May Be Peaking
Blue Chip Macroeconomic Forecasts Plot Steady 2005 and 2006 Growth
This issue's Regulatory Report Sponsor: APW Wyott Innovations | Industry ReportSponsor: Kolpak/Manitowoc Foodservice Group
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Special Report:
Publisher's Revised 2005 E&S Market Growth And
First Guess For 2006
Strong equipment action is pushing up this year's overall E&S forecast numbers; next year shapes up nicely, tood budgeting mills....[full report]
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Stainless Steel, Other Commodities Prices May Be Peaking
Pricing for 304 stainless sheet and other critical materials used in foodservice equipment and supplies may be reaching their peak in the current cycle, according to transaction pricing data and forecasts from Purchasing magazine. But prices for several core materials remain "stubbornly high," said Purchasing Executive Editor Tom Stundza. He added that he's heard there may have been some fall off in stainless prices in recent weeks, in part because of increased foreign supply, but that Purchasing transaction data for the next few weeks will tell the story.
In the second quarter 2005 report on commodity transaction prices from the magazine, 304 stainless sheet, with applicable surcharges, averaged $2,590 a net ton. This was up from $2,482 in the first quarter and $2,433 in the second quarter last year. The metal was averaging $1,600 to $1,700 a ton in early '03.
But Purchasing forecasts average prices will fall back to $2,341 in the third quarter and $2,251 in the fourth. Forecasts for next year average in the range of $2,220 to $2,237.
Other critical materials also appear to be at or close to their peak, including aluminum, cold-rolled sheet and galvanized sheet steels and corrugated used in shipping containers. But copper prices continue to climb as do most of the plastic resins used widely in foodservice. And energy prices, including electricity and oil-based products, are not forecast to decline markedly any time soon. Natural gas will come off its second-quarter spike, but then plateau.
Stundza said the sales price average for all the more than 100 commodities the magazine tracks has risen only 9% so far this year versus 38% in all of '04. Stundza's group forecasts only a 2% drop in '06 and a 6% decline in '07.
Purchasing commodities data and forecasts are available for purchase at www.purchasingdata.com or by calling Kathy Becker at the magazine at 781/734-8203.
Section sponsored by Hatco Corp.
Blue Chip Macroeconomic Forecasts Plot Steady 2005 and 2006 Growth
For those of you without an economist on staff, our friends at Blue Chip Economic Indicators report that the latest consensus forecasts for 2005 and '06 U.S. economic growth put real growth of gross domestic product in the 3.2% to 3.3% range for every quarter from second quarter '05 through the fourth in '06. The calendar growth forecast for '05 now stands at 3.6%, according to the July 10 issue of the newsletter. That's up 0.1 point, but it's all because of revised growth for first quarter '05.
The real GDP growth forecast for calendar '06 is 3.3%. So what we see are forecasts for a gradually slowing economy that's bumping along in the moderate growth range.
Disposable personal income and consumption are also forecast to show moderate growth over the next year and half. The former will range from quarterly annualized real growth of 3.3% to 3.9%. Consumption growth will stick near 3.0% over the next six quarters, forecasts the consensus.
The economists polled expect two to three more quarter-point interest rate bumps by the Federal Reserve this year and a Federal funds target rate of 3.83% at year end and 4.13% at year-end '06.
On the down-side risk ledger, the consensus says the chance of a recession beginning in '06 is 18.6% while the odds in '07 are 25.6%.
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