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Hirsh Mohindra Chicago Business Update

By admin on April 29, 2013 in

Hirsh Mohindra Chicago Business Update: Spring 2013

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Following fast on the heels of the latest Hirsh Mohindra economic news update regarding the U.S. national economic expansion last  Friday pointing to  a 2.5 percent increase in growth in the first quarter over a year earlier, the local Chicago business outlook of noted local player Mead Johnson Nutrition is seemingly aligning with earlier modest expectations of some of our more well-known corporations headquartered here in the Windy City.

Mead Johnson Nutrition Co.’s first-quarter earnings climbed 5 percent, as higher prices for the infant formula maker’s products in Latin America and part of Asia countered a drop in volume from North America and Europe.

The Glenview company also said Thursday that it was reaffirming its forecast for 2013 earnings to range between $3.22 and $3.30 per share. Analysts expect, on average, $3.28 per share, according to FactSet.
For the three months that ended March 31, the company earned $172.5 million, or 85 cents per share. That compares to earnings of $164.2 million, or 80 cents per share, the previous year.
Adjusted earnings totaled 85 cents per share, which matched analyst expectations.

Revenue grew more than 5 percent to $1.04 billion, and that topped the average analyst forecast for about $1.02 billion.

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Hirsh Mohindra Report: First Quarter U.S. Economic Expansion

By admin on April 29, 2013 in

Hirsh Mohindra : First Quarter U.S. Economic Expansion

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The U.S. government said Friday that the economy expanded 2.5 percent in the first quarter over a year earlier, falling short of expectations of 3 percent growth and compounding worries about the global economy. The report came after a report in Japan said its consumer prices fell 0.9 percent in March, underlining challenges to the international community’s efforts to pull the world’s leading economies out of a long spell of debilitating deflation.

The downbeat reports were tempered by expectations the European Central Bank will either lower interest rates or expand financial support for the 17-country euro area at its meeting Thursday, said Lim Ho-sang, a Seoul-based economist at Samsung Futures.

Investors are also waiting for more data to better assess the health of the U.S. private sector as the weaker-than-expected growth of the U.S. economy largely stemmed from lower government spending. U.S. March housing sales and April employment figures are scheduled to be released this week.

 

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Hirsh Mohindra: Thoughts On “New Urbanism”.

By admin on April 3, 2013 in

It seems the enthusiastic prognostications for a “new urbanism” in our big established cities has run into a buzz saw of facts running counter to the hype. Chicago, New York, the Pacific Northwest, the San Francisco Bay area and other legacy cities have been welcoming an influx of desirable info economy migrants: young, educated, politically liberal, averse to traditional t.v. watching and obsessed with the online world of social networks, video-on-demand, online news reading and wireless devices like the Ipad and Iphone.

These “new urbanists” are the leading edge of the Millenial generation that is now exiting colleges in droves and seeking to connect with other like-minded people in tightly-clustered city centers with the hip lifestyle amenities of organic farmer’s markets, yoga studios, live theater and music venues and high-end fashion outlets. As such, the older big city centers that had been abandoned during the late 20th century by Baby Boomers and Gen  Xer’s in favor of suburbs now seem to be making a comeback. Or so the story has been repeated by major corporate media outlets (most of whose staffers also share in this new urbanism sensibility).

But along come a startling rejoinder this received hype by none other than Joel Kotkin, respected author and essayist on issues ranging from demographics to geography to urban planning. According to Kotkin, the latest info on America’s fastest-growing cities still point to the suburbs as the destination of the future- only this time it’s new suburbs surrounding cities like Houston and Oklahoma city, not those surrounding Los Angeles or northern New Jersey.

This linked article is an eye-opening read for Hirsh Mohindra Chicago visitors on a subject of ongoing importance to this blog. Enjoy:

But in fact neither density nor size necessarily determine which regions generate new high-end jobs. The growth in STEM—or science-technology-engineering and mathematics-related—employment in Houston, Raleigh, Nashville, Austin, and Las Vegas surpassed that in San Francisco, Los Angeles, Boston, or New York. One reason: most STEM jobs are not found in fashionable fields like designing social media or videogames but in more prosaic activities tied to medicine, manufacturing, agriculture and (horror of horrors) natural resource extraction, including fossil fuel energy. In this sense, technology reflects the definition of the French sociologists Marcel Mauss as “a traditional action made effective.”

This pattern also extends to growth in business and professional services, the nation’s biggest high-wage job category. Since 2000, Houston, Dallas-Fort Worth, Charlotte, Austin and Raleigh expanded their number of such jobs by twenty percent or more—twice the rate as greater New York, the longtime business-service capital, while Chicago and San Jose actually lost jobs in this critical category.

article source: “Houston Rising” from New Geography.

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Hirsh Mohindra Florida Forecast 2013: Guarded Optimism

By admin on February 11, 2013 in

Hirsh Mohindra’s economic reporting team has found that the prospects in 2013 for South Florida remains guardedly optimistic. South Florida’s fastest-growing sector will be construction at 5.5 percent annually, followed by business and professional services at 4.3 percent. The education and healthcare sectors will grow at 2.1 percent, according to the forecast.

Here are some highlights for Florida as a whole:

  • Payroll job growth is expected to average 1.8 percent during 2013
  • Sectors expected to have the strongest average growth during 2012-2015 are construction; professional and business services; transportation and utilities; education and health services
  • Housing starts will accelerate to just under 120,000 by 2014

Florida’s population growth will continue to pick up and by 2015, should hit 1.7 percent, the fastest rate since 2006.  Retail sales will grow at a pace of 4.1 percent during 2012-2015, after growing in 2011 at the fastest rate since 2005.

Article Source: Florida Sun Sentinel

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Hirsh Mohindra New York- Mid Atlantic Region 2013

By admin on February 10, 2013 in

As Hirsh Mohindra has reported in earlier posts, the economic mood in the nation ranges from guarded optimism in the South and Sun Belt states to continued sluggish conditions in the northern half of the U.S. (excluding the upper MidWest). The regional outlook for the Mid-Atlantic states comprising of New York, New Jersey and Pennsylvania remains in the mostly sluggish column. Standard and Poor’s site recently posted its own assessment of this coming year’s prospects in this zone:

Our forecast for 2013 economic expansion in the Middle Atlantic region is 1.6%, essentially unchanged from our October projection. The pace of job gains across the region has weakened in recent months though performance continues to be modestly favorable. We expect professional and business services to contribute the most to employment growth in the region. Health care will also be prominent particularly given the region’s aging population relative to the nation as a whole. Overall, our forecast for moderate payroll growth of 1.0% in 2013 is down from 1.3% in our previous projection.

Volatility in Wall Street’s performance is an ongoing risk to the health of the New York and New Jersey economies especially. We believe contraction in the financial services sector is likely over the next year, tempering income growth. The development of drilling in the Marcellus Shale across western Pennsylvania has boosted the commonwealth’s economy, but low natural gas prices have recently slowed production. Nonetheless, we expect this activity to contribute to economic growth and employment in the region.

Home price declines were fairly modest relative to other parts of the country, and signs of real estate market improvement are now evident. We have revised our October forecast upward to reflect an even greater rise in home prices and a jump in housing starts in 2013. We note that New York and New Jersey rank low on affordability, which somewhat constrains housing sector growth.

The economic impact of Hurricane Sandy is still being determined although data appear to confirm a slowdown in employment gains and economic activity at the end of 2012, particularly in the hard-hit coastal areas of New York and New Jersey. As noted above, consistent with past natural disasters, we expect to see an uptick in auto sales, construction, and retail activity in the coming months due to rebuilding efforts and the temporary deferral of production and consumer spending into early 2013. In the long term, we expect the storm’s influence on key economic indicators to be relatively small.

According to the Pew Center on the States, New York, New Jersey, and Pennsylvania rank relatively low on federal spending subject to possible sequestration, making them potentially less vulnerable than other states. However, Pennsylvania does have a notable presence of military contractors, which defense cutbacks could hurt. Should Medicaid be included in any future deficit-reduction package, the Middle Atlantic states could be disproportionately affected. NASBO’s most recent State Expenditure Report indicates that New York and Pennsylvania are among the top five states in terms of Medicaid spending as a percentage of total budget.

Article Source: Standard and Poor

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Hirsh Mohindra Forecast For Washington State: Outside Pressure Downward

By admin on February 6, 2013 in

National and international forces are dragging at the Washington state economy, according to the state’s Economic and Revenue Forecast Council.

Washington’s slow economic recovery is characterized by high levels of unemployment and higher levels of uncertainty, the council reported during a Sept. 6 review meeting.

“A lot of the uncertainty that we’re facing affects the entire U.S. economy,” said Stephen Lerch, who was appointed as director of the forecast council at the meeting.

Three major factors impacting the state’s economic outlook are Europe’s financial struggles, slowing Asian economies and a national “fiscal cliff” based on congressional decisions, he said.

The portion of Europe that uses the Euro as currency has slipped into recession, causing concern in the U.S. due to the country’s ties to European banking, Lerch said. Asian markets that have bolstered the U.S. economy are also slowing growth rates, particularly China, which was previously seeing rapid economic expansion.
“China, of course, is a huge trade partner for Washington,” Lerch said.

In the state of Washington, legislators have yet to agree on the best methods of alleviating economic stress caused by out-of-state pressures, Lerch said. The Economic and Revenue Forecast Council is not involved in those decisions.

Instead, the council’s specialty is forecasting, which proves to be plenty of work, he said.
For state agencies submitting budget proposals this week, upcoming revenue forecasts could prove crucial. While the economic outlook for Washington in general may not directly affect state funding allocations, revenue forecasts are important pieces of information for state budgeting decisions.

The council will release its next revenue forecast on Sept. 19, followed by the final forecast of the year in November.

Article Source: Kery Bray- Oregon Live

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Hirsh Mohindra Texas Business Outlook 2013

By admin on February 5, 2013 in

The outlook from the Dallas Fed regarding improved economic conditions which is consistent with faster growth in Texas for 2013 is reflected in some of the figures the Fed recently cited in its January report:

  • Texas factory activity rose sharply in January, according to business executives responding to the Texas Manufacturing Outlook Survey
  • The production index rose from 3.5 to 12.9
  • The new orders index jumped 13 points to 12.2, its highest reading since March 2011

Other measures of current manufacturing activity also indicated stronger growth in January. The capacity utilization index shot up from 2.1 to 14.0, implying utilization rates increased faster than last month. The shipments index rose 9 points to 21.9, indicating shipments quickened in January.

Hirsh Mohindra’s reporting team has gathered more evidence weighting toward better perceptions in January of broader business conditions. The general business activity index increased from 2.5 to 5.5, its best reading since March. The company outlook index also rose sharply to 12.6, largely due to a drop in the share of firms reporting a worsened outlook from 10 percent in December to 6 percent in January.

Labor market indicators reflected a sharp increase in hiring but flat workweeks. The employment index jumped out of negative territory to 8.7, with about 20 percent of employers reporting hiring and 11 percent noting layoffs. The average workweek index edged down to a reading of 0.8, which is consistent with unchanged hours worked.

Price and wage pressures increased in January. The raw materials price index moved up from 21.9 to 27.8, indicating input costs rose faster this month. The finished goods price index rose sharply from about zero to 10.2, its highest reading since February 2012. The wages and benefits index rose four points to 19.2, reflecting rising wage pressure, although the great majority of manufacturers continued to note no change in compensation costs. Looking ahead, 44 percent of respondents anticipate further increases in raw materials prices over the next six months, while 25 percent expect higher finished goods prices.

Expectations regarding future business conditions improved slightly in January. The index of future general business activity ticked up from 7.1 to 9.2. The index of future company outlook rose from 15.4 to 20.8. Indexes for future manufacturing activity moved up strongly this month.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected Jan. 15–23, and 88 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.

Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.

Article Source: DallasFed.org

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Hirsh Mohindra Chicago Business Outlook 2013

By admin on January 5, 2013 in

It’s that time of year when Hirsh Mohindra’s business team looks ahead to business and consumer developments across the country. This time it’s the Chicago metro region and the Great Lakes business climate we’re evaluating. Here is an interesting note from U of Chicago’s famed Booth School of Management’s forecast team back in Dec.:

“Banks don’t see many lending opportunities. They are hoarding cash.”

Randall S. Kroszner – Chicago event

“Capital spending and investment in human capital have likely been impaired by the uncertainty over what tax rates are going to be.”
Carl R. Tannenbaum, AB ’81, MBA ’84 – Chicago event

Speakers: Randall Kroszner, Norman R. Bobins Professor of Economics, Chicago Booth

A former Fed governor, Kroszner studies regulation of financial institutions, international financial crises, corporate governance, debt restructuring and bankruptcy, and political economy.

Carl Tannenbaum: As chief economist at Northern Trust, Tannenbaum briefs clients and colleagues on the economy and business conditions, prepares the bank’s official economic outlook, and participates in forecast surveys.

Raghuram Rajan, Eric J. Gleacher Distinguished Service Professor of Finance, Chicago Booth
Prior to resuming teaching in 2007, Rajan was the economic counselor and director of research (chief economist) at the International Monetary Fund. In September 2012, he became the chief economic adviser in India’s Finance Ministry.

Article Source: ChicagoBooth.edu

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Hirsh Mohindra Los Angeles Business Outlook 2013

By admin on January 5, 2013 in

It’s that time of year when Hirsh Mohindra’s business team looks ahead to business and consumer developments across the country. This time it’s the L.A. metro region and the Southern California business climate we’re evaluating. Here is an interesting note from UCLA’s famed Anderson School of Management’s forecast team:

” In its fourth and final quarterly report of 2012, the UCLA Anderson Forecast’s outlook for the United States says that Gross Domestic Product (GDP) will grow at less than a 2% annual rate through mid- 2013. After that, the forecast expects growth to pick up and exceed 3% for most of 2014 with housing activity leading the way. Unemployment will stay close to the current 7.9% rate in 2013, but gradually decline to 7.2% by the end of 2014. By the end of the forecast period, inflation is expected to be above the Fed’s 2% target, bringing to an end the zero interest rate policy that has been in place since late 2008.

In California, though the passage of Proposition 30 by California voters creates some risk and has some impact on the forecast, the outlook for 2013 and 2014 is not much different than the previously released September forecast, with numbers marginally lowered for 2013 and 2014 still seen as a year that California’s growth rate exceeds the nation’s.:”

Article Source: UCLAforecast.com

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