Thursday, January 5, 2012

Happy New Year, I think

When I reasoned why the manufacturing sectors served by industrial lasers were outperforming analysts' forecasts, I was slightly hesitant to talk about it. I had been stung before in 2008 when I came away from EuroBlech in October touting the optimistic forecast of the fabricating metals sector only to be rudely shocked into reality as that industry collapsed in December of that year as the great recession of 2009 took hold.

But today the industries that exhibit fertile ground for growth in industrial laser processing - energy, transportation, medical devices, fabricated metal products and aerospace - are now acknowledged by even the most jaded analysts as solid factors in positioning manufacturing as an economic leader in an otherwise down market. And by extension these industries are a strong contributor to the record 2011 growth of industrial laser revenues.

However, once stung - forever wary, and I reacted to the beginnings of some less than enthusiastic forecasts by showing caution in my 2012 market forecast, which those of you who are digital subscribers will read on January 15th and others will read online at the next week.

But now, as this is being written, a raft of new information is appearing that suggests that manufacturing, at least in the US, is in for a more active period than anticipated. The Institute for Supply Management cued by a strong December growth in manufacturing suggests that the first half of 2012 should be very good for US manufacturing and in fact 11 of 18 US manufacturing industries will expand in the first 6 months of the year, including those that drove the 2011 market to new highs. Furthermore, 3 of our market drivers are forecast to expand for the entire year.

The Association for Manufacturing Technology and I were on the same track, and they cautiously forecast a positive outlook for 2012. IHI Global Insight was more positive, saying that a 2012 recession was unlikely.

Globally, the picture was not as clear and The Washington Post hedged on the US situation, as seen by surveyed economists, as possibly threatened by the situation in Europe, an issue that I factored into my forecast.

Right now, things look bright in the industrial laser sector at least for the first two quarters. Even problems in solar seemed to be easing as expansion in South America is set to grow this year. So sit back and enjoy 2012, at least the first half, and hope that it is strong enough to offset any potential decline later in the year.

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