Q4 Economic Webinar with Dr. Joe Webb

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Join us for the fourth quarter economic outlook webinar with Dr. Joe Webb, sponsored by MindfireInc. With an increasingly confused economic environment, Dr. Webb has the right prescription for …

Join us for the fourth quarter economic outlook webinar with Dr. Joe Webb, sponsored by MindfireInc. With an increasingly confused economic environment, Dr. Webb has the right prescription for navigating these rocky waters. Topics to be discussed include:

* The latest economy fun & games going into the election, and the first look at 2009's economy
* The print economy as the industry prepares for Graph Expo
* The latest survey of print businesses and their planned end-of-year actions
* Technology trends to watch for in 2009 and 2010
* Fall into Fall with Dr. Joe’s reading list

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  • 1. WhatTheyThink Economics & Research Center Economic Outlook Webinar This program will begin at 2 PM EDT Presented by: Dr. Joe Webb, Director WhatTheyThink Economics & Research Center September 24, 2008 Sponsored by Hosted by WhatTheyThink Sponsored by MindFireInc www.WhatTheyThink.com © 2004, WhatTheyThink.com © 2008, WhatTheyThink.com
  • 2. Agenda  The latest fun & games  First look at 2009's economy  Technology trends to watch for in 2009 and 2010  Our Readers’ View: Latest Economic & Research Center Survey Results  Fall into Fall with Dr. Joe's Reading List © 2008, WhatTheyThink.com 2
  • 3. The Overall Economy: Y/Y GDP is the real story  Real GDP on a Y/Y basis  2006q3 2.4%  2006q4 2.4%  2007q1 1.3%  2007q2 1.8%  2007q3 2.8%  2007q4 2.3%  2008q1 2.5%  2008q2 2.2% © 2008, WhatTheyThink.com 3
  • 4. Can we believe the economic data?  Inflation adjustment in PCE (the way GDP is adjusted) is not behaving properly on US data, imports, and exports  PCE (Personal Consumption Expenditures “deflator”) uses the CPI and adjusts based on the volumes of purchases  CPI is a fixed market basket of thousands of goods, regardless of demand  PCE underestimates inflation effects and therefore may overestimate GDP  Rapid changes in prices create data havoc, no matter which direction  It’s a reminder that we should not be preoccupied with short-term data that are always subject to revision months later  Government statisticians will get it right – two years from now © 2008, WhatTheyThink.com 4
  • 5. Leading Economic Indicators Source: The Conference Board Chart: Dallas Federal Reserve © 2008, WhatTheyThink.com 5
  • 6. Housing Sales Source: Bureau of the Census Chart: Dallas Federal Reserve © 2008, WhatTheyThink.com 6
  • 7. Initial Jobless Claims and Unemployment Rate Source: Bureau of Labor Statistics, Department of Labor Chart: Dallas Federal Reserve © 2008, WhatTheyThink.com 7
  • 8. Federal Reserve Economy-Wide Industrial Capacity Utilization © 2008, WhatTheyThink.com 8
  • 9. Yield Curve Source: Federal Reserve Board Chart: Dallas Federal Reserve © 2008, WhatTheyThink.com 9
  • 10. Real Value of the Dollar Source: Dallas Federal Reserve © 2008, WhatTheyThink.com 10
  • 11. Exports and Imports © 2008, WhatTheyThink.com 11
  • 12. Consumer Sentiment and Confidence © 2008, WhatTheyThink.com 12
  • 13. Unemployment Rising © 2008, WhatTheyThink.com 13
  • 14. Q. Recession or Not? A. Worse  Recession  No Recession  The press has declared a  Only Q4-07 was negative, recession, so therefore… and barely so  Still at full employment,  Housing stinks and will get worse even though at high end  Financial crises, huge government  Exports are growing bailout  Fed won’t raise rates  Banks are not lending  Lower commodities prices will add to GDP and economic activity  Unemployment getting worse  Housing was a regional bubble and  Auto sales are bad some markets are improving  Inflation above historical rates  Financial crisis on way to being solved  Commodity prices starting to  Capital gains still at 15% decline, indicating slowdown © 2008, WhatTheyThink.com 14
  • 15. Real Issues  Stagflation: slow growth, high inflation  Fed backed into a corner of its own making  Mortgage markets sluggish, still settling out  Taxes will rise, dampening investment  Net present value of projects have higher thresholds because of higher taxes and higher inflation  Weak dollar (on a long-term basis) reduces interest in foreign direct investment  Waiting for dollar to stabilize or reverse course  Tax rebates were illusionary, and another stimulus package will be even more inflationary  Productivity > real GDP, means employment will not increase  Economic sense continues to suffer in this political year, and can take a while to unwind, considering recent banking problems © 2008, WhatTheyThink.com 15
  • 16. Bottom Line: A Very Difficult Job for All Industry Executives to Navigate  Not a true recession, but it will definitely be called one  Real GDP for the 2009 may be below 2%  Q2-08 was 3.2%, revise to 2.2%?  Inflation for the 2008 will top 5%, 2009 as much as 5.5%  Unemployment has reached 6%, and can go to 6.5% easily, or even higher in 2009  Workforce growing faster than normal population growth as households send second and third workers into workforce  Fed will have to put the brakes on easing in 2009 to control inflation, but may not be able to  Oil price is still much higher than last year despite (temporary) pullback © 2008, WhatTheyThink.com 16
  • 17. Commercial Printing Sponsored by Hosted by WhatTheyThink Sponsored by MindFireInc www.WhatTheyThink.com © 2004, WhatTheyThink.com © 2008, WhatTheyThink.com
  • 18. What the Market is Telling Us  Not getting good signals from content-creation employment data  Media shift still ongoing despite media budget cutbacks  Monthly changes in print volume accelerating to the downside; Q4 looks weak  Business conditions data indicate “Tale of Two Cities” split, which is usually signal of shakeout and upcoming credit problems © 2008, WhatTheyThink.com 18
  • 19. Employment Continues to Weaken, Even in Content Creation © 2008, WhatTheyThink.com 19
  • 20. © 2008, WhatTheyThink.com 20
  • 21. © 2008, WhatTheyThink.com 21
  • 22. © 2008, WhatTheyThink.com 22
  • 23. © 2008, WhatTheyThink.com 23
  • 24. Updated U.S. Commercial Printing Forecasts (in August 2008 $)  Conservative model:  GDP model  2008: $100.9B  using +2.5% GDP  2013: $82.5B real growth rate  2008: $103.1B  2012: $96.2B  Aggressive model:  2008: $96.8B  2013: $60.2B  WTT ERC forecasts  2008: $97.0  2013: $78.0B © 2008, WhatTheyThink.com 24
  • 25. Newspaper Industry Woes Not Being Cured by Online Revenues Inflation-adjusted ad dollars, annualized as 4-quarter moving totals $70 based on data from Newspaper Association of America, www.naa.org and the Bureau of Labor Statistics © 2008, WhatTheyThink Economics & Research Center $60 Print Online Total $50 $40 $30 $20 Online ad revenues now 7.6% of total, $3.3 B, growing <6% $10 $- 1971 Q4 1972 Q4 1973 Q4 1976 Q4 1977 Q4 1978 Q4 1981 Q4 1982 Q4 1983 Q4 1986 Q4 1987 Q4 1988 Q4 1991 Q4 1992 Q4 1993 Q4 1996 Q4 1997 Q4 1998 Q4 2002 Q4 2003 Q4 2007 Q4 1974 Q4 1975 Q4 1979 Q4 1980 Q4 1984 Q4 1985 Q4 1989 Q4 1990 Q4 1994 Q4 1995 Q4 1999 Q4 2000 Q4 2001 Q4 2004 Q4 2005 Q4 2006 Q4 © 2008, WhatTheyThink.com 25
  • 26. Make Sure Growth is Real  Stay aggressively ahead of costs by changing procedures, workflows, tools  Penny-pinching is meaningless, creativity is priceless  Latest multipliers to compare years in August 2008 dollars  2003: x1.187  2004: x1.156  2005: x1.116  2006: x1.074  2007: x1.054  2008: x1.000 © 2008, WhatTheyThink.com 26
  • 27. Commercial Printing Survey Results Sponsored by Hosted by WhatTheyThink Sponsored by MindFireInc www.WhatTheyThink.com © 2004, WhatTheyThink.com © 2008, WhatTheyThink.com
  • 28. Who Responded?  Principal data target: 344 U.S. Commercial Printers  Well-distributed across all employee size classes and subclasses  Representative of WhatTheyThink commercial printer subscribers  Collected data from in-plant printers and other segments  To appear in columns, audio charts of the week and special reports  Data projected to marketplace using stratified method © 2008, WhatTheyThink.com 28
  • 29. How 2008 compares to 2007 for U.S. Commercial Printers © 2008, WhatTheyThink.com 29
  • 30. What are the top three or four issues that companies like yours must face in 2009? © 2008, WhatTheyThink.com 30
  • 31. What are the top three or four issues that companies like yours must face in 2009? The “bottom items” © 2008, WhatTheyThink.com 31
  • 32. What areas are you emphasizing to deal with the slower economy? © 2008, WhatTheyThink.com 32
  • 33. What areas are you emphasizing to deal with the slower economy? © 2008, WhatTheyThink.com 33
  • 34. What areas are you emphasizing to deal with the slower economy? © 2008, WhatTheyThink.com 34
  • 35. Content Creation Survey Results Sponsored by Hosted by WhatTheyThink Sponsored by MindFireInc www.WhatTheyThink.com © 2004, WhatTheyThink.com © 2008, WhatTheyThink.com
  • 36. What designers have been working on in the last six months © 2008, WhatTheyThink.com 36
  • 37. What ad agencies have been working on in the last six months Note: mid-size and large agency data not projectable © 2008, WhatTheyThink.com 37
  • 38. Graphic Designers – Media that will grow by more than 10% in their work © 2008, WhatTheyThink.com 38
  • 39. Ad Agencies -- Media that will grow by more than 10% in their work © 2008, WhatTheyThink.com 39
  • 40. Tech Trends to Watch in 2009 and 2010 Sponsored by Hosted by WhatTheyThink Sponsored by MindFireInc www.WhatTheyThink.com © 2004, WhatTheyThink.com © 2008, WhatTheyThink.com
  • 41. “Computer-phones” to be more than just the iPhone  Google Android  T-Mobile phone now released  The Android project and the Open Handset Alliance  Companies and organizations involved:  Broadcom, China Mobile Communications, eBay, Google, Intel, LG Electronics, Marvell Semiconductor, Motorola, NTT DoCoMo, Nuance Communications, NVIDIA, Qualcomm, Samsung, Sprint Nextel, T-Mobile, Texas Instruments, many others © 2008, WhatTheyThink.com 41
  • 42. http://www.msnbc.msn.com /id/26510338/ © 2008, WhatTheyThink.com 42
  • 43. Rise in “netbooks”  Numerous small notebooks from Asus, Dell, others  Usually Linux or Windows XP-based, uses Intel Atom © 2008, WhatTheyThink.com 43
  • 44. Mobile books and other media  E-books will have a major move  Amazon Kindle: new size to be out soon  Designed for the textbook market  Sold more than 250,000 of current model  Esquire’s e-paper stunt  “Mobile Media” will be relatively small market compared to others, but will become part of daily information and entertainment access © 2008, WhatTheyThink.com 44
  • 45. Web 2.0 (whatever that is) grows  Social networking continues to move beyond its younger audience  WSJ and NYT have added social networking in last 2 weeks  More people using computers as “thin clients”  Collaboration media go mainstream  Market segments get smaller and smaller; the need to brand and use multiple media grows larger and larger  Public relations continues to be key area © 2008, WhatTheyThink.com 45
  • 46. Dr. Joe’s Fall Reading List Study hard! Tests to be Given During Graph Expo Sponsored by Hosted by WhatTheyThink Sponsored by MindFireInc www.WhatTheyThink.com © 2004, WhatTheyThink.com © 2008, WhatTheyThink.com
  • 47. Dr. Joe’s Fall Reading List  How media are used by 21 different B2B segments, an American Business Media survey  Annual Veronis Suhler Stevenson communications markets forecast summarized in their press release  Graphic Design USA survey of designers… their verbatim comments are priceless  Microsoft’s PC ad campaign? Produced on a Mac! © 2008, WhatTheyThink.com 47
  • 48. Dr. Joe’s Fall Reading List  Financial Times: Greenspan’s Sins Come Back to Haunt Us  LA Times sues its new buyer: why it’s a bad idea  Good discussion of what ails the newspaper biz  Investor Mark Cuban tells newspapers to declare bankruptcy  New York Magazine: Is the Book Business at its End?  B2B: Why Custom Publishing is Staying Strong  Pew Internet Survey: Games and Civic Involvement  It’s not what is commonly thought © 2008, WhatTheyThink.com 48
  • 49. Dr. Joe’s Fall Reading List  Price Waterhouse Coopers State of Publishing and Media Report  Access to summaries  News article about it  Offline media (“out of home media”) discussed by New York Times  E-mail gaining in utility among marketers (DM News)  Best implementation of digital magazine I have seen  The Sporting News according to Texterity’s implementation © 2008, WhatTheyThink.com 49
  • 50. AdWeek: The Real Digital Revolution  … the real digital revolution is about consumer empowerment, the ability to research and learn about products and services and make decisions independently from, and in spite of, any sort of advertising messages.  …quot;Theyquot; are talking about us and we can't butt in. … Until recently, the paradigm went something like this: Ad leads to purchase. Nowadays, it goes like this: Ad leads to Google leads to purchase. That's seismic.  Car companies are among the ones hardest hit by this shift… consumers [are] turning in droves to review sites, message boards and the like, to get the real story on the vehicles they plan to buy -- even to find out what kind of cars someone like them should plan to buy…  That's a pretty shocking development in a market that was shrouded in mystery and misinformation for years and where consumers had nothing more to rely on for information than the materials the car companies issued. © 2008, WhatTheyThink.com 50
  • 51. Dr. Joe’s Fall Reading List  How they date recessions at the NBER  How the Consumer Price Index works: the BLS answers its critics  World Bank data resources  Dr. Joe’s free software list © 2008, WhatTheyThink.com 51
  • 52. Other Dr. Joe Items  Dr. Joe on the road… go to “the sightings” page on WhatTheyThink  Dr. Joe and Richard Romano have rewritten “Renewing the Printing Industry.” It’s now available at no charge as a free download thanks to our sponsor MindFireInc. © 2008, WhatTheyThink.com 52
  • 53. Thank You to MindFireInc! QUESTIONS? Mark Your Calendars: Next Economic Outlook Webinar Sponsored by Hosted by WhatTheyThink is December 10, 2008 Sponsored by MindFireInc www.WhatTheyThink.com © 2004, WhatTheyThink.com © 2008, WhatTheyThink.com
  • 54. Audio Chart of the Week - FREE  Chart of Industry Trend or Topic  Weekly  3 to 6 minutes  Wide range of topics from content creation and technology to end-use markets and more  Use the chart in internal presentations © 2008, WhatTheyThink.com 54
  • 55. Management, Marketing, and Economic Notes - FREE  “Blog”-like comments about latest news  A lot happens between weekly columns  Sometimes I just vent  “Road Warrior”  Comments and recommendations about personal computing and communications technologies © 2008, WhatTheyThink.com 55
  • 56. Economics & Research Center - FREE  ERC Industry Snapshot  Updated just hours after new industry data are published  Data  Shipments, capacity  Imports/exports  Employment  Postal weights and pieces  Markets  Content creation & printing  Paper  US & Canada © 2008, WhatTheyThink.com 56
  • 57. In Search of Dr. Joe… and others…  WhatTheyThink.com  “Mondays with Dr. Joe”  Economics & Research Center (ERC)  ERC Notes  ERC Industry Snapshot  PrintCEOBlog.com  Economic and other webinars © 2008, WhatTheyThink.com 57