MAPI Quarterly Economic Forecast: Exports could offer some relief from weaker 2009 outlook
GDP, Durable Goods, Industrial Equipment among key areas facing downturn in ‘09
Tuesday, May 20, 2008 -- Arlington, VA -- Hopes for something more than a temporary rebound in the U.S. economy anytime soon could be frustrated, but the manufacturing outlook in particular might be somewhat brighter due to continuing strength in exports, according to a new report.

The Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts that inflation-adjusted GDP growth will slow to 1.3 percent in 2008 before improving to 1.9 percent in 2009. The 2009 forecast is down from 2.5 percent projected in the February outlook. By supplying major assumptions for the economy and running simulations through the Global Insight Macroeconomic Model, the Alliance generates unique macroeconomic and industry forecasts.

“The 2008 recession looks like it is going to be milder and more prolonged rather than normal,” said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. “The large, but temporary, tax rebates and massive monetary policy easing will interrupt an economic downturn in the second and third quarters of this year but will unwind in late 2008 and early 2009. The outlook is for a prolonged period of subpar growth rather than a concentrated adjustment.”

Manufacturing production growth will show a significant deceleration from an already low 1.7 percent growth in 2007 to an estimated 0.4 percent in 2008, preceding a decent upswing to 3.1 percent in 2009. Production in non-high-tech industries is anticipated to decline 1.2 percent this year and to grow by 1.6 percent in 2009.

There is some positive news in the computers and electronics products sector, as high-tech industrial production is expected to rise 16.9 percent in 2008 and 14.8 percent in 2009, an improvement in the high-tech outlook over the 14.3 percent and 10.1 percent, respectively, projected in the previous MAPI report.

The GDP account for inflation-adjusted investment in equipment and software should increase by 0.7 percent in 2008 and by 2.8 percent in 2009. The largest percentage gains in capital equipment spending will come in the high-tech sectors. Inflation-adjusted expenditures for information processing equipment are expected to rise 6.9 percent in 2008 and 3.3 percent in 2009.

The forecast calls for industrial equipment expenditures to decline by 4.3 percent this year and to further decline by 2.8 percent in 2009. The latter figure contrasts with a previously anticipated 1 percent gain in 2009 in the February forecast. The outlook for spending on transportation equipment calls for a 10.4 percent decline in 2008 followed by a solid recovery to 8.8 percent growth in 2009.

Spending on non-residential structures is expected to fall over the next two years. While spending in this area increased by 12.9 percent in 2007, it is presumed to rise by just 2.6 percent in 2008 and to decline by 7.4 percent in 2009.

Exports and imports, however, are potential beacons in the soft economic environment. Export growth should outpace that of imports by a wide margin by the end of 2009. Inflation-adjusted exports should rise 8.3 percent in 2008 and 9.7 percent in 2009, while imports are expected to remain flat this year and increase by just 1.6 percent next year.

“The significant decline in the value of the dollar is important because it allows U.S. manufacturers to tap into the economic strength of the rest of the world to cushion our downturn,” Meckstroth added, “and makes it more expensive for foreign firms to be competitive from an overseas location.”

The forecast envisions the unemployment rate to rise to 5.2 percent in 2008 and to 5.6 percent in 2009.

The Manufacturers Alliance/MAPI, established 1933, is a nonprofit organization engaged in economic and policy research, continuing professional education, and allied activities. The Alliance's corporate membership includes U.S.-based and international companies in manufacturing and related business services. Website: www.mapi.net.

back to top

****************************************************************************

M&A deal activity in industrial products slows
Weakness in the U.S. economy continues to affect M&A deal activity and value in the industrial products sectors, specifically industrial manufacturing, chemicals, and metals, according to a series of PricewaterhouseCoopers LLP first quarter M&A reports.

While deal activity remains steady, deal volume and value is not on pace to exceed 2007 levels; however, the number of deals announced during the quarter is on track to meet or exceed 2006 levels.

The slowdown in the pace of large deals announced in the first quarter is a direct reflection of the difficult financing environment. Only the transportation & logistics sector is on pace to exceed the level of large deals in both 2006 and 2007. Deal interest for targets in Asia has been particularly strong during the quarter across each subsector. Additionally, the weak U.S. dollar is driving the increased interest in U.S. targets by cross-border acquirers.

"Record levels of M&A were reached in 2007 across the various sub-sectors. Given the economic downturn in the U.S. we cannot expect to see similar levels or value this year; however, our Q1 analyses show respectable levels of activity," said Dean Simone, U.S. industrial products leader at PricewaterhouseCoopers. "This economy offers significant opportunities specifically for those well-capitalized strategic investors who are in the best position to initiate deals."

Details on each sub-sector M&A report:
Industrial manufacturing
Deal activity in the global industrial manufacturing sector declined slightly in the first quarter of 2008, according to the inaugural edition of Assembling Value: Global Industrial Manufacturing Mergers & Acquisitions Analysis. A total of 39 deals (disclosed value at or above $50 million) were announced in Q1 2008, down from the 47 announced deals in the first quarter of 2007 but on par with the 38 deals seen in Q1 2006.

Total deal value for industrial manufacturing transactions during the first quarter of this year totaled $7 billion, a significant decline from $13 billion in the first quarter of last year and the $31 billion announced in Q1 2006. The decline in total deal value is related to a slowdown in large deals (disclosed value of at least $1 billion), of which there were none in Q1 2008 compared to 17 announced in 2007 and the 17 in 2006.

Overall, the pace of deals involving U.S. targets declined (12 announced deals) in Q1 2008 as compared to the total deals announced over the past two years (65 deals in 2007 and 51 deals in 2006). However, the proportion of foreign acquisitions of U.S. targets has increased by 33% in number of deals during the first quarter of 2008 as compared to only 22% of deals announced during 2006 and 2007. The relative weakness of the U.S. dollar has likely been a key factor in this change, since it makes acquisitions of U.S. targets more attractive to foreign entities.

Despite the overall decline in deal activity, the pace of deal activity for targets in China has increased with six deals announced during the first quarter compared to nine and 17 in all of 2006 and 2007, respectively. And, of these nine deals, 83% involved acquirers from China, up from 65% in 2007 and 33% in 2006. Globally, three regions accounted for 90% of target companies both in terms of the number of deals and deal value announced during the first quarter of 2008: Asia and Oceania, UK and Eurozone, and North America.

For the complete story, visit Modern Distribution Management at http://www.mdm.com/issues/1_1/breaking-news/5261-1.html.

back to top

****************************************************************************

Summit offers on-demand streaming video compliance training
Summit’s new streaming video format provides an effortless way of immediately delivering EH&S training videos directly to any computer via the Internet, without the hassle of downloading. This new delivery format is a cost-effective, quick and easy-to-use way to administer video training programs. Streaming video offers a number of benefits, including:
    * Unlimited access to Summit’s premier video
      library of over 300 courses
    * Eliminate shipping and handling costs
    * Ability to view from anywhere, anytime,
      24/7 using a computer’s web browser
    * Downloadable facilitator guide, PowerPoint
      presentations, and quiz included
    * Perfect for training multiple shifts or locations

With Summit’s streaming video, training administrators have the on-demand convenience of unlimited access to over 300 video titles from Summit’s leading training library.

Visit www.safetyontheweb.com to demo Summit’s new streaming video to get the hands-on experience of safety training delivered directly to your computer.

back to top

****************************************************************************

MRO by the numbers special session at ISA, June 3
Want a copy of the most extensive product market share report ever made available for North America? Then sign up for the ISA Conference and Trade Fair Education Only Registration.
Attend the ISA Industrial Supply Conference and Trade Fair Education Only Program on Tuesday, June 3rd, 2008. This year’s event will take place at the Hyatt Regency O’ Hare located in Rosemont, IL, right outside of Chicago. Our Education Only registration makes it easy and cost effective to bring your managers and for those within driving distance to come for the day. The unique track format divides the sessions into three key components: leadership, sales/marketing, and operations.

Every session from our renowned speakers will be totally unique. Included in this educational program is “The Numbers That Count” session presented by John Jacobson, Ed Gerber, and Bill Hodgdon. This break through session will provide you with information on dollar market size for 14 groups of MROP products for all of Canada and 100 of the largest markets in the United States. Everyone who attends this session will receive a copy of this 76-page report.

Other educational sessions include: an overview of the Great Game of Business presented by Bill Fotsch, a presentation from Murray Lyons on how 1 percent changes to key variables can increase profitability up to 75 percent, a session with Bob DeStefano who will show you how to make your company’s website an online marketing machine, and a session that will help you close the generational gap between your employees and customers presented by Robert Wendover.

The cost of this program is only $175 per person. To download the registration form, please visit www.isaconference.org/PDFS/registration/EducationOnlyForm.pdf.

back to top

****************************************************************************

Hobart offers free troubleshooting poster of solutions to common stick welding issues
  • Poster illustrates common weld defects, their causes and solutions
  • Available free of charge in Spanish and English

Hobart Brothers has issued the fourth in an ongoing series of free educational welding posters, addressing the 10 most common welding problems and their likely causes and solutions. Using diagrams and concisely written explanations, the poster is a handy reference tool for both professional and educational welding environments.

The problems discussed apply to SMAW welding. Included in the poster are discussions of the following welding problems:
  • Porous welds
  • Cracked welds
  • Undercutting
  • Distortion
  • Spatter
  • Lack of fusion
  • Overlapping
  • Poor penetration
  • Magnetic Arc Blow
  • Inclusions

This poster and the previous three posters in the series, “Types and Positions,” “AWS Classifications” and “Tensile and Impact Strength,” are also available in Spanish.

The posters, measuring 28-in. X 22-in., are available free of charge by contacting the Hobart Brothers Information Center at (888) 462-2789 or email the company fulfillment center at databs@mindspring.com. For product spec sheets or to learn more about Hobart Brothers products, visit Hobartbrothers.com, call 1-800-424-1543.

back to top

****************************************************************************

Industrial careers program receives $25,000 donation
The Power Transmission Distributors Association Foundation today announced that it has been awarded a $25,000 donation by the Tomkins Corporation Foundation in support of its major workforce initiative, the Industrial Careers Pathway (ICP). The donation is one of three $25,000 investments made by the organization over the past three years, making it the single largest supporter of the ICP initiative.

“Through the involvement of Gates Corporation in PTDA, Tomkins can contribute to helping develop our future workforce,” said Justin Aschenbrenner, vice president, Industrial Business Development, Gates Corporation (Denver, Colo.) and PTDA Manufacturer Council director. “These future employees will provide new inspiration and innovation which are the lifeblood of our organization.”

“The continued generosity of the Tomkins Corporation Foundation and that of other donors has allowed ICP to make huge strides in helping address the workforce development challenges that the industrial distribution and manufacturing sectors face in the today’s North American market place," said Kenneth A. Miko, vice president, BDI (Cleveland, Ohio) and 2008 PTDA Foundation president. “The industrial distribution sector is vital to the health of the global economy, and the Tomkins Corporation Foundation donation provides a valued base of support for the industry's future."

Spearheaded by the PTDA Foundation, the Industrial Careers Pathway is a North American workforce initiative that addresses the need for a skilled industrial distribution and manufacturing sales and customer service workforce today and tomorrow. ICP links students and job seekers to career paths in industrial distribution and manufacturing through partnerships with local educators and employers.

For more information about efforts being made by ICP to address the need for a skilled industrial distribution workforce, visit www.idcareers.org or contact ICP at info@industrialcareerspathway.org or 312-516-2100.

back to top

****************************************************************************

Makita introduces three new industrial grinders with advanced gear protection
Makita USA, Inc., manufacturer of high- quality professional quality power tools and accessories, has released three new angle grinders equipped with Super Joint System (SJS) technology to prevent gear damage. The three new angle grinders – 9564PC (4-1/2”), 9565PC (5”) and 9566PC (6”) – are powered by a Makita-built industrial 13-amp motor to deliver more output power for increased performance, and are built for welders, fabricators, plumbers, masons, and more for a range of grinding applications.
The three new grinders are engineered with Makita’s exclusive SJS technology.

If the grinding wheel should accidentally catch or bind, the gears automatically disengage from the motor. SJS stops the wheel, minimizes grinder kickback, and protects the gears. The three new grinders also feature a labyrinth construction, which seals the motor from exterior dust and debris by creating a complex set of channels and prohibiting contamination. In addition, the protective zig-zag varnish seals the motor from dust and debris by creating a barrier under rotation.

In addition to durability and performance, Makita engineered comfort and ergonomics into the grinders for professional use all day long. The gear housing can be rotated 90 degrees, and the side handle can be easily installed on both sides of the tool as well as the top for operator convenience. The “tool-less” wheel guard adjustment provides easy clamping.

All three grinders are built to suit the most demanding applications, including cutting, ferrous metal, paint and rust removal, shipyard maintenance, heavy machinery, metal polishing, general steel grinding, auto repair work, cutting brick and masonry, and restoration work. The grinders are built for professional tradesman, including welders, fabricators, plumbers, masons, electricians, automotive, stone and tile work, HVAC, and more.

For more information, call800-4-MAKITA (1-800-462-5482) or visit www.makitatools.com.

back to top

****************************************************************************

Milwaukee introduces new digital inspection camera
Milwaukee Electric Tool Corporation introduces a breakthrough in professional inspection technology, the new Digital Inspection Camera. Designed for the professional trades, including plumbers, electricians, HVAC, and MRO professionals, Milwaukee’s Digital Inspection camera significantly enhances productivity by helping professionals quickly and accurately locate and evaluate common jobsite problems.

With advanced digital imaging technology and a 2.5” high-resolution color LCD display, the Digital Inspection Camera provides a crystal clear picture of tough to reach places such as inside pipes, drains and equipment and behind walls. Optimal image quality and control is achieved via an exclusive Image Zoom (2x) feature and LED brightness control. Equipped with a durable, detachable, 3’ water-tight flexible cable and a small camera head, the Digital Inspection Camera fits through holes as small a 3/4” and gets into, under and around tight spaces. An ergonomic handle, comfortable in any orientation, features up-front power and image controls for true one-handed operation. A power saving, auto shut-off feature preserves battery life.

The Digital Inspection Camera is available in 6-volt (Alkaline, model 2300-20) or 12-volt lithium-ion (model 2310-22) configurations. Both models are protected in a durable, impact resistant carrying case. Model 2310-22 includes one, 12-volt lithium ion battery and charger. For more information visit www.milwaukeetool.com.

back to top

****************************************************************************

Jungheinrich to display cutting-edge solutions at CeMAT 2008
Jungheinrich will showcase a number of significant new solutions related to warehouse logistics at CeMAT 2008. The expo, held on May 27-31 in Hannover, Germany, is the world’s leading trade show for intralogistics and an audience of over 60,000 is expected to be on-hand to view the 1,000-plus exhibits. Jungheinrich AG’s cutting-edge technologies will be on display in two distinct areas at CeMAT: within the indoor exhibition arena at the company’s 75,300 square foot booth (Nos. P33/P34) and at an adjacent outdoor exhibition area. At these displays, CeMAT visitors will be presented with a wide range of innovative Jungheinrich products, including forklift trucks, racking systems and services for internal logistics – plus the displays will be attended by a staff of nearly 250 Jungheinrich professionals.

For more information on Jungheinrich’s innovations on display at the CeMAT Trade Fair, contact Jungheinrich Lift Truck Corp., 5601 Eastport Boulevard, Richmond, VA 23231. Call: 804-737-7400. Fax: 804-737-7467. Or, visit the website at http://www.jungheinrich-us.com.

For more information on CeMAT 2008, visit www.cemat.de.

back to top

****************************************************************************