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End Market Report

Medical Equipment and Supplies; Consumer Goods.

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Medical Equipment and Supplies

By now, it should come as no surprise to anyone in either the plastics or moldmaking
sectors that demand in the U.S. for medical equipment and supplies
is growing. Our forecast calls for this industry to continue to grow at (should
we say it?) a healthy rate for the foreseeable future. Total U.S. output of these
products is expected to expand by 4% in 2012 after a gain of 4% in 2011. This
forecast is based on a continuation of three long-term market trends: 1) an
aging population; 2) increased access to healthcare products both domestically
and globally; and 3) continued advances in healthcare technologies.
Since there is strong consensus amongst industry analysts that the
medical equipment and supplies sector will continue to grow, the question
then becomes: By how much? The chart is a graph of the rate of growth for
U.S. production (by volume) of these products. This graph illustrates a couple
of useful points. First, even in periods of overall recession, this industry does
well. Production of these medical products enjoyed vigorous growth during
the recession in 2001, and it dipped by only a modest 2% during the Great
Recession of 2009. Second, during the past 12 years, this industry has averaged
growth of about 4% per year. This is stronger than the overall growth in most
other industries and economic indicators (see Consumer Goods chart).

Consumer Goods
Our forecast for total U.S. production of consumer goods calls for a gain of
3% in 2012 following a rise of just over 2% in 2011. This forecast is based on a
continuation of the prevailing economic fundamentals that have the greatest
effect on consumer spending. These include: slow improvement in the employment
data; stability in house prices; a gradual increase in access to credit;
and slow but steady gains in household incomes. The risks to this forecast are
biased towards the downside at the present time, but overall we expect 2012
to be moderately better than 2011 for most suppliers of consumer products.
For the sake of comparison with the medical equipment and supplies industry
reported above, we have included a chart of the rate of growth in U.S output
of consumer goods. This chart shows that the total U.S. output of consumer
goods is vulnerable to recession in the overall economy. Production of these
goods declined by 1% during the recession of 2001, and output plunged by 8%
in the Great Recession of 2009. It should be noted that current production
levels of consumer goods in the U.S. are still not back to their pre-recession
levels. One other trend that bears mentioning is that, excluding the periods of
recession, the long-term growth rate for these products is only in the range of
1%-2%. This is close to the overall rate of population growth in the U.S. These
industries have been buffeted in recent years by imports from countries such
as China, but this trend should improve gradually in the coming years.
 

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