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TRENDING & SPENDING The 'R' Word Surfaces Again BY DARLENE GUDEA, president Darlene Gudea, PRESIDENT Frank Chow, CHIEF ECONOMIST Trade Show Executive's 3.4% SEPTEMBER Trending & Spending Forecast Fig. I: TSE Forecast of Net Square Feet of Exhibit Space 3.8% 3rd Quarter 3.8% 2012 Fig. II: TSE Forecast of Number of Exhibiting Organizations 2.8% SEPTEMBER 3.2% 3rd Quarter 2.8% 2012 Fig. III: TSE Forecast of Professional Attendance 3.1% SEPTEMBER 3.1% 3rd Quarter 3.6% 2012 Fig. IV: TSE Annual Forecast of Revenue 5.0% Year Ending December 2012 How Trade Show Executive Magazine's Trending & Spending was compiled Trade Show Executive Magazine's Trending & Spending Forecast aggregates information from numerous sources: government and business reports; interviews with industry experts and economists; and the TSE monthly poll of its 20-member Economic Forecasting Board. Unbiased, reliable data—whether positive or negative—is the foundation of solid business planning. Oceanside, CA – All the hue and cry over Europe's economic and political woes are creating a distraction from pressing domestic issues that are causing a quite discernible slowdown in the U.S., said Frank Chow, chief economist for Trade Show Executive Media Group. Tere is talk of a recession resurfacing. Chow pointed to the key economic indicators which are slowing: y Manufacturing is tottering as the Philly Fed Index (an index of the Philadelphia Federal Reserve Bank) plunged to a (16.6) reading in June following a tumble to (5.8) in May. Te Empire State Index, compiled by the Federal Reserve Bank of New York, dropped from 17.1 to a disturbing low of 2.3 in June. In the survey, manufactur- ers were asked about expectations for the six months ahead. Tis key barometer of future activity fell in June to 23.1, the low- est level since last October. It was also the fiſth consecutive monthly decline. y Retail sales declined in May for the second consecutive month due mainly to lower gas consumption and auto sales. y Job growth turned anemic as a mea- ger 69,000 net jobs were created in May. Economists were expecting 158,000 jobs. Te number of long-term unemployed, those looking for work for more than six months, rose by 300,000. Te unemploy- ment rate ticked up to 8.2%. y Industrial production slipped 0.1% in May (seasonally adjusted) aſter gaining 1% in April. April's reading was revised down from an initially reported 1.1%. y A key measure of consumer senti- ment dropped 2.4 points in June to 62.0, according to Te Conference Board. It was the fourth consecutive monthly decline. Consumer confidence is seen as a predic- tor of consumer spending. ECRI Releases a Recession Warning In June, the Economic Cycle Research Institute (ECRI) reconfirmed its reces- sion warning originally made in Sep- tember 2011. "ECRI's repeat recession call isn't based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index followed by downturns in the Weekly Leading Index and other shorter-leading indexes," Chow pointed out. Why should ECRI's recession call be heeded? Te Economist magazine noted they have correctly called three recessions without any false alarms in-between — a record few can boast. The slowdown has occurred, but whether the economy will turn still remains in doubt. Consumers, who control 70% of the economy, are still spending. As long as that continues, it will be difficult for the economy to fall into recession. Frank Chow, TSE CHIEF ECONOMIST "Although I disagree with the ECRI prediction now as I did back last Septem- ber, I must admit a recession currently seems more plausible within the next six months," Chow conceded. He compared the U.S. economy to a massive ocean liner. Once it heads in one direction, it cannot reverse direction very quickly. It takes a multitude of strong forces over time to slow it down, and then a lot of nudges in the opposite direction to get it to turn. "Te slowdown has occurred," he said, "but whether the economy will turn still remains in doubt, and it can go either way." He pointed out that consum- ers, who control 70% of the economy, are still spending. As long as that continues, it will be difficult for the economy to fall into recession, Chow said. www.TradeShowExecutive.com | July 2012 19 SPONSORED BY