the April 2009 Issue in PDF Format - Trade Show Executive

T r e n d i n g & S p e n d i n g
Economic Woes and Bailout
Backlash Hit Trade Show
Industry Hard
Darlene Gudea,
VP/publisher & editor
Trade Show Executive’s
Trending & Spending Forecast
Fig. I: TSE Forecast of
Net Square Feet of Exhibit Space
12.0%
2nd Quarter
Fig. II: TSE Forecast of Number
of Exhibiting Organizations
9.0%
2nd Quarter
11.5%
2009
9.0%
2009
Fig. IlI: TSE Forecast of
Professional Attendance
20.0%
2nd Quarter
12.0% May
10.0% May
20.0% May
18.4%
2009
Fig. lV: TSE Annual Forecast
of Revenue
14.0%
Frank Chow,
chief economist
Year Ending December 2009
By Darlene Gudea,
VP/publisher & editor
Carlsbad, CA - With each successive
stimulus or bailout plan, consumers’
confidence has plunged to an
unprecedented nadir. The Conference
Board Consumer Confidence Index
has declined every month since
September 2008, falling moderately in
January to 37.4 and crashing in February
to 25, reaching another all-time low.
The trend has been driven by worsening
business expectations and a rapidly
deteriorating job market. Moreover, the
massive $787 billion stimulus bill touted
to save or create more than 3.5 million
jobs is increasingly being perceived as
more of a government spending bill
that may not create significant new jobs
until next year. Meanwhile, the average
person continues to hear about neighbors
or colleagues losing jobs. Also, recent
government and media rhetoric from the
numerous bailout plans is causing some
immediate fallout in employment directly
related to the trade show industry.
Since the recession began
(December 2007), the economy has
eliminated roughly 4.4 million jobs,
with more than half – 2.6 million –
disappearing in the last four months.
This surprising decline fostered
speculation that some industries are
being partly dismantled, said Frank
Chow, chief economist for Trade Show
Executive. Layoffs are multiplying due
to the collapse of the financial system,
prompting even healthy companies to
shed workers and shut down operations
out of concern they may soon lose
access to credit. Borrowing costs have
spiked for American companies, making
businesses reluctant to expand and
hire. “There was a huge increase in
uncertainty and a huge hit to confidence
which caused a large rethinking among
businesses,” said Ethan Harris, codirector
of U.S. economics research at
Barclays Capital.
When Department of Labor
data revealed that 651,000 more jobs
disappeared in February, a sense
emerged that escalating joblessness
may reflect a wrenching restructuring
of the economy, Chow said. The
unemployment rate surged to 8.1% in
February – its highest level in 25 years.
In key industries – manufacturing,
financial services and retail – layoffs
have accelerated so quickly it suggests
many companies are just abandoning
whole areas of business, said Chow.
“The current pace of decline is
breathtaking,” said Robert Barbera,
chief economist at the research and
trading firm ITG.
Keith Hall, Bureau of Labor Statistics
commissioner, testifying before Congress
about the recent monthly job losses
said, “… just to put it into perspective,
we’ve only had maybe ten months where
we’ve lost 500,000 jobs or more in the
history of our series since 1940. This
is four of the ten, all in a row.” While
past recessions have proven that most
lost jobs will not return, other industries
usually emerge to create jobs when
economic growth resumes.
However, some economists doubt
this will be the case this time. “These
jobs aren’t coming back,” said John
Silvia, chief economist at Wachovia. “A
lot of production either isn’t going to
happen at all, or it’s going to happen
somewhere other than the United States.
There are going to be fewer stores,
fewer factories, fewer financial services
operations. Firms are making strategic
decisions that they don’t want to be in
their businesses.”
Much of the job losses are at legacy
American brands. Here is a list from 2008
16 April 2009 Trade Show Executive www.TradeShowExecutive.com