Renewed 3rd quarter outlook shines spotlight on opportunities for food manufacturers
PMMI recently released its Third Quarter 2011 Economic Outlook, forecasting slower growth for the rest of 2011 and into the first quarter of 2012. During the remainder of 2012, however, the report predicts economic growth will sustain an increase in production.
The report examines several different market segments and regions, including the food and food preparation index, which is projected to show slow growth for the rest of 2011 at 1.0% above 2010 levels. However, production is projected to reaccelerate in 2012 and end the year 3.3% above 2011, the highest annual growth rate in 10 years. During this period, food production averaged 0.9% annual growth. The shift marks a move toward the long-term sustainable growth rate for the industry.
Other highlights from the outlook include:
• Total Industry Capacity Utilization reached 77% in March, a 30-month high. Despite a slight slip in April, the trend has remained on the increase, a positive sign for the economy, but is still 3.9% below the historical average.
• The Purchasing Manager’s Index is 1.3% above the same period last year, and the 1/12 rate-of-change has yet to form a low.
• The Corporate Bond Prices trend shows the prolonged period of low interest rates has been favorable for businesses as well as consumers. Interest rates have increased by 0.8%age points since their low point in 2010.
In anticipation of the projected growth in 2012, food manufacturers should start planning their capital purchases now. Manufacturers can benefit from technologies that increase automation and energy efficiency to not only increase output but effectively manage costs. Systems that offer enhanced flexibility will also be critical, as they will enable manufacturers to quickly accommodate changes to a product line and boost productivity.
All of these technologies, and more, can be seen at PACK EXPO Las Vegas 2011 (September 26–28; Las Vegas Convention Center), the largest show in North America for packaging and processing innovation. Food manufacturers will have access to over 1,600 exhibitors featuring equipment, materials, containers and components to address critical issues, including food safety, sustainability, shelf life and freshness.
Discounted registration is currently available at www.packexpo.com. F&BP
Jorgé Izquierdo, Vice President, Market Development, PMMI
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