Ephemeral forecasting

March 1, 2011
As you read this, the massive 6 to 7 foot snow banks that defined the roads during the "old fashioned" winter we experienced in New England should be long gone.


As you read this, the massive 6 to 7 foot snow banks that defined the roads during the "old fashioned" winter we experienced in New England should be long gone. I can't remember a winter like this since the infamous blizzard of 1978 when I took the last flight out of Boston for California and was stranded in San Diego for a week as the commonwealth of Massachusetts was shut down for driving by the governor. My wife has never let me forget that one.

The cost of cleanup after the many storms that dumped on us is astronomical, what with snow removal budgets shattered in January and damages from overloaded roofs piling up in many communities around the area. Companies experienced costly shut downs that hit just as the manufacturing economy is enjoying a rapid recovery from the recession. The impact on the regional economy has been severe, and only those engaged in snow removal and the repairing of snow removal equipment have benefited.

The figures for the winter months are not complete, but the region's economy took a hit unfortunately in a rather tenuous period when bad news can quickly reverse the upward trend.

The annual market forecast appearing in the last issue of this magazine is already being revised upwards as end of 2010 reports from public companies are coming in, showing unexpectedly high revenues and profits. Ephemeral, a word I used in an ILS Industry Watch e-Newsletter regarding the industry's fears about the recovery, is very appropriate. The Wall Street Journal, a bastion of business conservatism, sometimes reads like the definition of that word as it reports on the recovery, couching almost every headline or lead with a "but" or "however" to mitigate the impact of the good news that is permeating the manufacturing sector.

If I didn't know better I would say the WSJ editors are acting like the TV weather forecasters this winter that seemed to be disappointed predicting a good day between all the storms they reported. Come to think of it, being a meteorologist in New England and not having storms to report is an anathema, like the weather forecasters in San Diego, where the daily report in the winter is typically a temperature change of 10 degrees. It's no wonder that New England is a meteorologist's nirvana.

As I have been reporting for the past few months, the markets for industrial laser products and services is strong, and this strength seems to project well into the coming year. The market sectors that are driving this growth are those that seem to have felt the recession less onerously and therefore recovered faster as the economy turned late last year. Driving this growth are visual display (iPads) and personal communications (smart phones) that are trying to satisfy an insatiable market. The makers of these products use lasers

To process these products, shipments into the manufacturing sector in Southeast Asia continues at a high pace. The other markets, such as microelectronics, medical devices, photovoltaics, and aerospace, are solid growth markets that have minor cyclical episodes. None of these episodes are severe enough to cause changes in capital equipment buying strategies. For example, the semiconductor market has transcended the recession for many laser and systems suppliers.

The laser business looks good for the year and even beyond as many companies are already filling their 2012 backlogs.

David A. Belforte
[email protected]

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