The 2020-2023 Business Cycle - MHEDA

Economic Outlook: The 2020-2023 Business Cycle

Presented by Brian Beaulieu

Monday, May 6 1:30 p.m. ? 2:30 p.m.

Sponsored by

The 2020-2023 Business Cycle

BRIAN BEAULIEU CEO & CHIEF ECONOMIST

2018 Forecast Results

If you heard ITR around two years prior...

2

Duration

Accuracy

US GDP

24

US Ind. Production

34

Europe Ind. Production

24

Canada Ind. Production

27

China Ind. Production

30

Retail Sales

28

Housing (Single Family Units)

26

Employment (Private Sector)

30

99.9% 99.4% 99.2% 97.1% 99.9% 99.6% 99.2% 99.4%

ITR Economics provides the best economic intelligence to reduce risk and drive practical and profitable business decisions.

First in Forecasts Since 1948

1

US Economy Stalls in 2019 and Into 2020

US Gross Domestic Product, SAAR, Chained 2012 $

US Gross Domestic Product

Quarter-over-Quarter Growth Rate

3-Month Moving Average

3/12 Rate-of-Change

20

20 6

6

4

4

18

18

2

2

16

16 0

0

-2

-2

14

14

-4

-4

12

12

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

? .$18.8 trillion ? Phase: B ? Quarter-over-Quarter: 3.0%

First in Forecasts Since 1948

-6

-6

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

2019: 0.9%

ITR Outlook

2021092:0:0.19.%8% 2022002:1:1.18.%3% 2022200122:23::1-.231.%.11%%

Source: BEA

Manage the Business Cycles to Maximize Profits

US Industrial Production to Gross Domestic Product

US IP

GDP

12

12

8

8

4

3.2% 4

0

0

-4

-2.9%

-4

-8 -6.9%

-5.2%

-8

-12

GDP

-12

US IP

-15.5%

-16

-16

'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24

First in Forecasts Since 1948

Year-over-Year, Quarter-to-Quarter (3/12) Sources: FRB, BEA

2

Availability is a Huge Advantage

World Natural Gas Production by Region

First in Forecasts Since 1948

Producers United States Russia Iran Canada Qatar China Norway Australia Algeria Saudi Arabia Rest of World World

bcm 760 694 214 184 169 142 128 105 94 94 1,184 3,768

% of World Total

20.2 18.4 5.7 4.9 4.5 3.8 3.4 2.8 2.5 2.5 31.3 100

Billion Cubic Meters Source: IEA

Freed Up Money Likely Not going to Capex 6 US Corporate Tax Rate and Gross Business Investment

70%

70%

Corporate Tax Rate %

60%

Gross Business Investment (% of GDP)

60%

50%

Linear (Gross Business Investment (% of GDP))

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

'60 '64 '68 '72 '76 '80 '84 '88 '92 '96 '00 '04 '08 '12 '16 '20

First in Forecasts Since 1948

Percent Sources: Tax Policy Center, FRED

3

Global Issues

? Business Cycle ? Tariffs

First in Forecasts Since 1948

Trade Stress Becomes Acute on the Downside of the Cycle

World IP 15

World Industrial Production Index to G7 Leading Indicator

Fair Trade

Indicator 6

10

12/12

5

Competition

4

1/12

2

0

0

-5

-10

-15 '92

World IP Indicator

'94 '96 '98 '00

First in Forecasts Since 1948

-2

-4

-6 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22

Rates-of-Change Sources: CPB Netherlands Bureau For Economic Policy Analysis, OECD

4

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