Issue link: https://tradeshowexecutive.epubxp.com/i/78074
TRENDING & SPENDING Continued from page 19 crisis in 2008. Sales fell in nearly every major category — from appliances and autos to department stores and furniture. Lastly, governments are part of the de- leveraging process too, Chow pointed out. State and local governments are slashing budgets and laying off thousands. Some cites have declared bankruptcy and there are more coming. States have been able to delay this reckoning by budget gimmicks and assistance from the Federal govern- ment mostly through the huge ARRA stimulus grants that are expiring, he said. "Te Federal government has been trying to keep the economy and big banks afloat and playing the enabler for those addicted to the government's trove; but traditional monetary and fiscal policies are no longer working," he lamented. A Silver Lining Like a phoenix rising from the ashes, housing seems to be ascending from its gloomy abyss to rescue an economy headed in the wrong direction, said Chow. "U.S. builders broke ground on the most new homes and apartments in nearly four years, the latest evidence that the housing market is recovering." Te Commerce Department said housing starts rose 6.9% in June from May to a seasonally adjusted annual rate of 760,000. Single- family housing starts, accounting for more than 70% of new residential construction, rose for the fourth straight month to a two- year high. Apartment starts, which can be volatile, increased aſter falling in May. Chow said the prognosis for home build- ing during the rest of the year is good: y Building permits, a sign of future con- struction, fell (3.7)% to 755,000, due to a decline in apartments but single-family homes edged up to its highest level since March 2010. When compared to the prior year, total building permits have climbed for nine months. y Te National Association of Realtors Pend- ing Home Sales Index, a forward-looking indicator based on signed contracts, increased 5.9% in May, its highest level since the expiration of the federal home buyer tax credit program. y Te NAHB/First American Improving Markets Index (IMI) rose to 84 in July. Te IMI is a count of metro areas clas- 20 August 2012 | Trade Show Executive sified as improving based on local home prices, job growth and building permits. A continued housing resurgence would benefit the economy, but Chow said we have to be realistic: housing will no longer be the driving force behind a resurgent economy anytime soon. New regulations and industry practices from the sub- prime fallout have seen to that. Econo- mists at IHS Global Insight, a consulting firm, don't foresee housing starts reaching 1.5 million a year, the normal pre-crisis level, until 2015. "At the current lower levels, home construction will likely have only a modest effect on the economy, but hopefully that will help keep us out of another recession," Chow said. Meanwhile, most economists blame the Euro crisis and the impending fiscal cliff for the current slowdown, but Chow said they are ignoring the underlying systemic issue of a nation burdened with too much debt and of wealth built on deceptive real estate values. Trade Shows Remain Relevant by Embracing Technology In a free enterprise system, severe reces- sions are usually an indication something big is broken, he said. Te business cycle allows time for a nation to figure out what the problem is and to build a better model. If this is done well, then old paradigms are destroyed and new ones created to address the new reality. In business, this is called innovation and in government it is called reform. "We already have a peek at some of the new paradigms, from the astonish- ing rise of social networks, search engines, cloud computing, and new forms of bank- ing to new tools such as smart phones, iPads, Skype, podcasting, etc. "Tey are transforming how we live and conduct business," Chow said. "Trade shows have been astute in being an early adopter of these emerging technologies which con- tribute to its relevance in this new econ- omy," he said. "But I am very concerned about ever-increasing new regulations that companies, including those involved in trade shows, are facing." Frank will shed some light on some of the new regulations that are cause for concern in the September edition of Trending & Spending. TSE Sector Performance BEST PERFORMING SECTORS y Apparel y Security y Business Services MIXED PERFORMANCE y Communications y Government y Manufacturing y Automotive y Housing y Medical y Retail y Food SECTORS UNDER PRESSURE y Construction y Home Furnishings Economic Indicators Consumer Confidence dropped 2.4 points in June to 62.0, according to The Conference Board. It was the fourth consecutive monthly decline. Core Inflation, which omits volatile food and energy prices, rose a minimal 0.1% in June. It was the fourth consecutive month with a negligible increase. Corporate Earnings expectations keep skidding downward for the S&P; 500 companies, from 4.8% in March to 1.7% in June to forecasts now of (1.6)% for the Second Quarter. This will be the third quarter to break the streak of eight consecutive quarters of double-digit growth. Employment increased by 163,000 from June to July on a seasonally adjusted basis after rising a revised 151,000 in June. It remained well below the 252,000 average from December to February. Gross Domestic Product grew at an annual rate of 1.5% from April to June, down significantly from 2% in the first three months of the year, according to the Department of Commerce. Housing Starts for single-family homes, which account for more than 70% of new residential construction, rose for the fourth straight month to a two-year high of 760,000. Industrial Production rose 0.4% in June after slip- ping (0.2)% in May (seasonally adjusted) and gaining 1% in April. The largest contribution to the increase came from motor vehicles and parts. Interest Rates (short term) remained near 0% in July, maintaining the ultra-low level set in Dec. 2008. The Leading Economic Index, a weighted gauge of 10 economic indicators that helps predict the fu- ture direction of the economy, zigzagged back down (0.3)% in June to 95.6 following a 0.4% increase in May that came after a (0.1)% decline in April to 95.5 (2004 = 100). The LEI reflects no signs of strength- ening in the economy over the next few months as it continues to sail through choppy waters domestically and internationally. Manufacturing in the U.S. unexpectedly shrank in June for the first time since the economy emerged from the recession three years ago, indicating a main- stay of the expansion may be faltering. The Institute for Supply Management's ISM Index fell to 49.7 from 53.5 in May. Figures less than 50 signal contraction. Retail Sales have fallen for three straight months with sales dropping (0.5)% in June — the first time since the height of the financial crisis in 2008. The unemployment rate remained at 8.2% in July. y Technology y Hospitality y Transportation SPONSORED BY