Foodservice Equipment Reports

The Sky Isn’t Falling

In this 24/7 news environment, I’d like to see a little perspective for once. If you watched or read almost any purported “news” late last week, you would have thought an economic D-Day was at hand. (Sorry, but it is June 6). We’re supposedly all headed down the tubes again. Gosh, how much can we blame on poor Greece?

OK, so instead of the expected 125,000 to 150,000 jobs the forecasters predicted, we got 69,000 in May. The Conference Board had a down Consumer Confidence Index month. Europe is a mess, but I think we’ve all figured out that the Eurozone didn’t have the infrastructure it needed to support a joint currency. They’ll fix it or they won’t. Growth in China, India and Brazil is slowing. We have political gridlock in the U.S. that won’t get unblocked until after the election. Oh, woe is us.

Come on! We’re about ready to start working on our forecast for 2013 and beyond. Much of the above is just the Wall Street sheep baa-ing in the wind. Not that fear isn’t a potent force, as President Roosevelt explained nearly 80 years ago.

But there is plenty of countervailing good news. Economists have been predicting the jobs slowdown for months, knowing that the very mild winter boosted hiring early this year, especially in construction. Take a moving six-month average and we have exactly the slow, but respectable jobs growth nearly everyone predicted. While the more volatile Conference Board’s confidence index was down in May, the University of Michigan’s Consumer Sentiment Index reached a four-and-half-year high. Oil and gasoline prices have fallen dramatically, putting a lot of extra spending power in consumers’ pockets.

The National Restaurant Association’s Restaurant Performance Index, released last week, remained well above the 100 tipping point in April for the sixth consecutive month. Sure, it was down a bit, including both capital expenditure markers. But overall, operators remain fairly optimistic about the next six months. Everyone felt the NRA show was very upbeat. And our own informal poll of major E&S manufacturers over the past couple weeks found a bit of slowdown in orders in April and May, but a pick-up toward the end of last month.

We try never to be Pollyannish about the outlook for this industry. We only hurt people if we’re too optimistic. There’s plenty of downside risk right now. But I think the fear from late last week was overblown. Do worry, but be happy.

Cheers,

 

Robin Ashton

Publisher

rashton@fermag.com

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