After Severe Year, Composites Veteran Predicts Modest 2010 Growth

Since 1960, the U.S. composites industry has had six downturns, but the one that continued last year was “very severe,” reported industry veteran and business analyst Ray MacNeil during a speech yesterday afternoon at COMPOSITES 2010. The good news: Composites companies have compelling reasons to be optimistic this year and beyond.

The composites industry—along with many others during the recession—has been “hammered” since late in 2007, MacNeil said, but he predicts it will grow 3 percent to 5 percent this year, then 8 percent to 12 percent annually from 2011-2014.

MacNeil pointed out that history is on the industry’s side. Using economic charts as illustration, he showed that U.S. growth in composites has far outperformed GDP, as well as competing industries such as steel and aluminum—and it’s not even close. “We can still safely say it’s a growth industry,” he said. “We’ve certainly slowed down, but we haven’t observed the peak and rapid decline associated with a mature industry. Better yet, we’ve always ratcheted back up after periods of decline.”

He showed that two indicators from the Conference Board’s Leading Economic Index predict economic growth in the second quarter of 2010. “It’s more reinforcement that recovery is on the way,” he said.

MacNeil also discussed how trends and developments in industries important to composites manufacturing, such as automotive, construction and wind, should help the industry rebound. “We’re not a one-trick show, and we’re not dependant on one sector of the economy,” he said. Also, the inherent advantages of composites (lightweight, strong, non-corrosive) should help to spark new applications, he said, but it’s also important to monitor issues such as regulation and offshore competitors.

“Remember, we are in quite a hole,” MacNeil said. “We took a nosedive in 2009, and we’ll be struggling to get out of that for a couple years. But we will get there.”

Then again, he might be among the first to admit that predicting economic matters isn’t an exact science. In a touch of levity that drew audience laughter, he presented his definition of an economist—”an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.”

This entry was posted on Tuesday, February 9th, 2010 at 5:30 pm and is filed under General Interest, Infrastructure, Keynote Speakers. You can follow any responses to this entry through the RSS 2.0 feed.