the April 2009 Issue in PDF Format - Trade Show Executive

of those companies with at least 5,000
layoffs announced:
• Citigroup - 59,000
• Bank of America - 35,000
(over three years - to 2011)
• HP Electronic Data Systems - 24,500
(over three years - to 2011)
• Linens ‘n Things - 21,250
• Lehman Brothers - 16,000
• Alcoa - 15,200
• Starbuck’s - 12,000
• AT&T - 12,000
• Wachovia - 11,250
• Bennigan’s Restaurants - 9,300
• JP Morgan/Washington Mutual
Acquisition - 9,200
• JP Morgan/Bear Stearns
Acquisition - 9,160
• Dell - 8,900
• Sony (USA) - 8,000
• Bank of America (Countrywide) -
7,500 and 928 in management
• Circuit City - 7,305
• American Express - 7,000
• NASA - 7,000
• American Airlines - 7,000
• Google - 6,000
• Sun Microsystems - 6,000
• Merrill Lynch - 5,150
• GMAC - 5,000
• Dow Chemical - 5,000
The year 2008 was the worst year
for job layoffs since World War II
and the First Quarter of 2009 affirms
that this trend is likely to continue.
According to Challenger, Grey, and
Christmas, a major outplacement firm,
planned layoffs at U.S. firms fell 23%
in February from January’s seven-year
high. However, the numbers of layoffs
are still well above the norm. Some
of the largest layoff announcements
in 2009 have come from major
corporations such as GM with another
47,000, Caterpillar with 22,000, NEC
with 20,000, and Panasonic and KB
Toys with 15,000 each. “The decline in
job cuts last month offers some hope
that January was the peak, and we will
now see layoffs begin to fall or at least
stabilize,” said John Challenger, the
firm’s CEO.
What are the potential impacts for
the trade show industry? Obviously,
exhibitor and attendee participation
at shows is already suffering. While
most trade show executives expect a
continuance of such erosion for the rest
of this year, recent critical comments
by President Obama, government
officials and the media may greatly
exacerbate the already fragile tourism
and convention business that support
trade shows. In February, the President
rebuked financial institutions saying,
“You can’t go take a trip to Las Vegas
or go down to the Super Bowl on the
taxpayers’ dime.’’ Then cable network
personalities got into the act slamming
bankers for attending and sponsoring
an event at the Venetian. Congressional
leaders soon followed suit, blasting
luxury travel and wasteful meetings for
firms taking government money.
Bailout Backlash
This started a wave of trip
cancellations by corporations worried
about “bailout backlash”. Wells Fargo
and Goldman Sachs both cancelled
plans to send employees to a Las Vegas
conference. The damage seems to
be widening: some 52% of meeting
planners at companies not receiving
government money have reduced
meeting budgets for this year because
of “bailout backlash”, according to
Meetings & Conventions magazines. Event
cancellations have spread throughout
Florida, California and other states.
Laurence Geller, the president and
CEO of Strategic Hotels and Resorts,
expects to lose almost 400,000 jobs
this year. “We lost an awful lot of
major businesses, and it’s not just those
receiving government bailouts that are
affected, but there’s a general fear of
criticism by people not only making the
bookings but people attending these
conferences,” Geller said. “It’s really
gotten out of hand because the meetings
and conference business is absolutely
essential to this nation.” Bob Gilbert,
chief executive of the Hospitality Sales
& Marketing Association International,
said, “Never before have we seen as
much concern in the corporate world
about the perception of the venue
or location where the organization is
holding a meeting.”
Trade Show Executive’s
Trending & Spending Forecast
Fig. V: Sector Performance
Best Performing Sectors
• Hospitality • Transportation
• Medical
Mixed Performance
• Business Services • Government
• Communications • Sporting Goods
• Entertainment • Technology
Sectors under pressure
• Apparel
• Food
• Automotive • Manufacturing
• Construction • Retail
Fig. VI: Economic Indicators
Consumer Confidence plunged to an unprecedented
level of 25 in February. This falling trend has been driven by
worsening business expectations and a rapidly deteriorating
job market.
GDP Growth: Real gross domestic product decreased at an
annual rate of 6.2% in the Fourth Quarter of 2008. The U.S.
economy is forecasted to shrink by 3.2% this year.
Housing Starts fell 16.8% in January below revised
December 2008 estimates.
Industrial Production fell 1.3% in February. The decrease in
industrial production is the sixth decrease in the last seven months.
Inflation rose 0.1% in February after a 0.2% gain in the prior
month.
Interest Rates: Short-term interest rates remain at a low
1% rate. Federal policy-makers will keep their benchmark
interest rate unchanged at 0% to 0.25%.
Job Losses have reached roughly 4.4 million jobs since the
recession began in December 2007 with more than half—2.6
million—disappearing in the last four months.
Leading Indicators: Five of the ten indicators that
determine the Leading Economic Index (LEI) increased in
January. Although the LEI has risen the past two months, it
is too early to project that the contraction that began in July
2007 is ending.
Manufacturing continues to slump. The auto industry is at
the center of the manufacturing slip with auto sales in February
down 41% to the lowest rate since December 1981.
Retail Sales declined 0.1% from January 2009 and 9.8%
below last year. Gasoline sales were down 32.3% from
February 2008.
Unemployment surged to 8.1%, the highest level in 25
years. In key industries—manufacturing, financial services and
retail—layoffs have accelerated so quickly that many companies
are just abandoning their business.
Sources: U.S. Department of Labor, Bureau of Labor Statistics;
The Conference Board; The Institute for Supply Management
(ISM); U.S. Commerce Department
Continued on page 18
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