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SUR/FIN ’09 Recap: Economic Keynote, Technical Conference Deliver

SUR/FIN 2009, the premier technical conference and exhibition for the North American surface finishing industry, kicked off June 15–17 at the Kentucky International Convention Center. The three-day event offered more than 70 technical sessions, a special keynote presentation focused on the economy, new product demonstrations, and networking opportunities galore.

Following are a few highlights from SUR/FIN 2009:

Keynote Session

Dr. Ken Mayland, president of ClearView Economics, set the tone with a special keynote presentation, “Surviving 2009–Economic Outlook & Advice.” Dr. Mayland, who has spent more than 30 years studying the business cycle and providing economic analyses to a variety of constituencies, covered a host of pertinent and timely issues, particularly those involving manufacturing, the financial markets, and consumer spending. He also examined the current recession through the prism of what he calls the last four recession “episodes” with the aim of identifying indicators that have historically preceded a recovery.

In Dr. Mayland’s view, the recovery is closer than we think. “Based on an examination of the past four recessions (1973–75; 1981–82; 1990–91; and 2000–01), a recovery usually begins within one or two months of the end of a peak in unemployment,” he explained. Additionally, in examining various indices that gauge the health of the economy—purchasing managers’ index (PMI), inventory levels, etc.—Dr. Mayland feels the turning point is near. “PMI has been up for five consecutive months, which puts us at a point where previous recoveries have begun.”

That is not to say that all (or most) businesses will recover simultaneously, Dr. Mayland warned. “Let’s assume we have a recovery—some industries will lead; others will lag behind,” he explained. As a subscriber to the “rubber band” theory of growth, Dr. Mayland expects a robust “snap back” out of the severely stretched 2007–2008 recession. “By comparison, the recessions of ’90–91 and ’00–01 were mild, hence the quick recoveries. In those years, however, we saw jobless recoveries.”

Over the short term, Dr. Mayland forecasts growth of 1% in the third quarter—based largely on a spike in durable goods orders. Manufacturing, he noted, is down more than 12% year over year because both businesses and consumers have been living off pre-existing inventories. Now that these inventories have bottomed out, they will need to be replaced, he said. Mayland has also seen three months of solid gains in the stock market, which, he notes, should “uncork spending.”

While Dr. Mayland is optimistic about the chances of a near-term recovery, he said there are potential threats to a full-scale turnaround. Among them: inflation; continued pullback in consumer spending (the April 2009 savings rate was 5.3%, up from 0% last spring); and a real risk of a “double-dip” recession, meaning the adverse effects that could ensue if a short-run momentum runs out of steam. That’s why he believes it’s critical that both Federal Reserve policy and government initiatives do the trick with respect to taxes and interest rates—variables that directly impact job creation and consumer spending.

While the nation rides out this economic storm, Dr. Mayland has some valuable advice for small-to-medium-sized businesses: remember that it will take years to restore wealth and jobs; continue to look for ways to make your businesses more efficient; and promote business-friendly legislation. With respect to the manufacturing sector at large, he believes suppliers may have to adjust their credit policies if lending does not loosen. He’s hopeful, though, that the financing will be there when needed. “The banks realize they must lend their way out of the recession if they are to achieve earnings growth,” he said.

In terms of specific action points for the metal finishing community, Mayland encourages both finishers and suppliers to keep their fingers on the vital signs of the overall economy by tracking key economic data (both national and regional) to help them make sound business decisions and forecast for the future. Specifically, he advises creating a recovery “spread sheet” that businesses can follow to more accurately gauge the economy’s performance. Among the indices and stats the spread sheet should contain: initial job claims; PMI; Baltic freight rates; housing starts; and, of course, auto sales.

"The value of good economic information is greatest when things are at their worst,” Dr. Mayland says. “In good times, even fools can make money.”

Technical Conference & Exhibition

Soon after the close of SUR/FIN 2008 in Indianapolis, the National Association for Surface Finishing (NASF), along with the Technical Committee, got to work on the educational component of the SUR/FIN 2009 program. Essentially, committee members looked at what worked best vs. what needed improvement and tweaked accordingly. The fruits of those advanced efforts paid off big time this year as evidenced not only by the participation in the technical conference but also the feedback provided by session attendees.

A survey of registrants revealed 90% of technical conference attendees felt the educational sessions “met or exceeded their expectations.” Among other things, they cited the “timeliness, depth and range” of the conference, which spanned the spectrum from nickel and chrome sessions to discussions on environmental issues and regulatory compliance.

"Registrations for the technical sessions were better than expected, because we put together a program that generated interest,” said Michael Siegmund, NASF president and executive vice president of MacDermid.

On the show floor, some survey respondents said they found new vendors. Overall, 74% said SUR/FIN 2009 met or exceeded their expectations—although many noted lower traffic in the exhibition hall. Given the overall state of the economy, this was not a surprise. “SUR/FIN registration has been better than expected, and the exhibition has been as expected,” Siegmund noted.

But a dismal economy didn’t keep scores of attendees from coming out to support SUR/FIN. Not surprisingly, nearly 59% said they came to SUR/FIN to leverage the many networking opportunities available. One survey respondent summed it up this way: “I am always amazed at the people who support our industry no matter what goes on.”

(For more on this story, see the July/August dual issue of Metal Finishing.)
 

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