The American Scenario in The Glass Industry

The United States is honoring its role, to the best of its ability, as the world's locomotive, although despite the positive performance of the real estate market, America seems to be recovering slower than expected.

The stumbling block today is Europe, increasingly beset by its own problems.

The American fall has come with a bigger dose of uncertainty than expected. The most important uncertainty is obviously the presidential elections result which alone can partially stall the economy until the polls outcome may put government policies in a clearer perspective and more concretely steer corporate decisions.


But the other uncertainties, maybe less apparent but however much more insidious, are those related to the general health of the world economy. In other words, the tough economic cycle seems to be shifting from the euro zone to the United States, which has always acted as a clearing house of international tensions. American businesses are struggling to remain in the black, while the emerging economies have recently slowed down and the European recession is caught in a vicious circle of sovereign debt/austerity/recession. If we also consider that fiscal policies today are anyone's guess, there is sufficient cause for concern. However, the so-called USA fundamentals are positive: real income has grown, the real estate sector is positively reacting to falling home loan rates with a 10% year-on-year increase in sales of existing housing and a 25% rise in new house completions; car sales are on the rise and the mean 10-year service life of the existing car fleet may soon lead to a sales boom. Jobs are also being added although at a  rate considered far too slow by many observers (an average of 139,000 units per month, in August). What is the bottom-line then? Experience has taught us that an economic upturn normally occurs in the months following presidential elections as a result of the enthusiastic mood in the so-called honeymoon period. And if we consider the traditional American optimism, coupled with their legendary pragmatism, it may be reasonably assumed that the growth trend will continue in 2013 and this will benefit Asia's economy and revitalize Europe's performance.

And how is the glass industry faring against this backdrop? The GlassBuildAmerica event hosted a number of conferences based on market research studies conducted by ITR ECONOMICS, an economic research and consulting firm and lively presented by Jeff Dietrich, senior economist and analyst with ITR ECONOMICS. The starting point was more or less in line with the picture outlined above, but some interesting remarks were added during the debate regarding the clear perception of what our society is experiencing:  a decade of profound changes that are also affecting the entire glass industry.

The first remark is that companies have suffered several setbacks due to the underperformance of the market, their number has shrunk or they have merged, whereas the weakest among them have gone under. The survivors are today uniquely positioned to more carefully ponder their decisions and more wisely identity the investments required. Technological innovation fueled by the moderate growth of the construction industry is driving glass companies to use new design models that require more comprehensive and multidisciplinary skills. And all this leads to a final remark concerning the qualification of personnel and particularly the need to hire, train, and develop a new generation of talents that will become the future key players of an industry that is just about to experience an additional sweeping change in its industrial fabric.

600450 The American Scenario in The Glass Industry
Date: 24 December 2012

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