Foodservice Equipment Reports

FER’s Equipment And Supplies Market Growth Forecast Holds At 4.6%

Given continuing favorable macroeconomic trends and near-record operator capital-spending activity in the latter part of 2015, Foodservice Equipment Reports has held to its 2016 forecast for current-dollar growth of the foodservice equipment and supplies market in the U.S. and Canada at 4.6%. Factoring out anticipated price increases by manufacturers, the magazine predicts real growth of 2.5% this year. The magazine also maintained its current estimate of 2015 growth at 4.8% nominal and 2.5% real. The numbers remain unchanged from those first released at FER’s annual President’s Preview market forecast meeting held last July.

“Everything we see convinces us the E&S market in the U.S. and Canada should continue its current decent growth trend,” said FER Publisher Robin Ashton. The coming year will be the seventh consecutive of real E&S market growth since the Great Recession.

Employment growth in the U.S. continues to be strong, gasoline prices continue to fall, and consumer confidence is at post-recession highs. Operators weathered slight slowdowns in the rate of sales and traffic growth late summer and into the fall. But the capital-spending indicator tracking buying during the past three months hit its fourth record high in the October Restaurant Performance Index survey conducted by the National Restaurant Association in the U.S. The forward-looking RPI capital spending indicator remains quite positive.

These indicators mirror strong numbers from the quarterly Business Barometer maintained by Marketing Agents Association for the Foodservice Industry, the group that represents independent manufacturers’ reps in the U.S. and Canada. The MAFSI Barometer had unprecedented increases during the first three quarters of 2015. Since its launch in the second quarter 2002, it had never tracked 5% growth in two consecutive quarters. It did so in the second and third quarters.

“We’ve been saying that 2015 is the peak of the current cycle for nearly a year now,” Ashton said. “We’re not so sure any more. We think 2016 will see real growth just as strong or maybe a tad stronger than 2015. At worst, it will be only slightly slower.”

Information on FER’s forecast and market research, including hard-number forecasts out through 2019, can be found here.

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