FER Revises E&S Market Forecast Downward

Foodservice Equipment Reports has trimmed its forecasts of foodservice equipment and supplies sales growth for 2012 and ’13. A clear trend of slowing growth in 2012, as charted by publicly reporting E&S companies and the Business Barometer maintained by the Manufacturers’ Agents Association for the Foodservice Industry, has led the magazine to cut its forecasted growth this year by a full point to 3.7% in current dollars and 1.6% in real terms.

“The 2012 slowdown is a bit deceiving,” said FER Publisher Robin, who prepares the forecasts with John Muldowney, v.p.- marketing at Alto-Shaam. “The big public companies were severely affected by the recessions in many European economies in the second and third quarters. This dragged down their overall results, which remained reasonably positive in the U.S.”  But Ashton noted that the forecasts are based on E&S market-size estimates from the North American Association of Food Equipment Manufacturers that include export sales. Thus, FER‘s forecasts must factor in those off-shore sales.

The magazine also cut its forecast for growth next year. The new forecast calls for growth of 3.6% in nominal terms and 2% after factoring out price increases, down about half a point each.

“Whatever Congress and the Administration do with taxes and the budget, disposable income growth is likely to shrink next year,” Ashton said. “And operators are facing significant increases in food costs and the uncertainty of implementing the new healthcare law. Both are likely to slow growth of capital spending by operators.”

Still, Ashton noted industry fundamentals remain positive. “There remains plenty of pent-up demand in the market,” he said. “Thousands of facilities need to be renovated and aged equipment, supplies and furnishings replaced.”

For information on the complete FER E&S Market Forecast package, including a recent update, contact Ashton at rashton@fermag.com or call 800/986-9616.

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