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End Market REPORT By Bill Wood Medical and Automotive Output of Medical Supplies and Equipment Still Strong scenario that seems highly unlikely at the present time), then the impact of Obamacare on this data will likely start to appear in 2015, about the same time as the next expected cyclical peak in the data. Medical Equipment - U.S. Industrial Production 12-Month Growth Rate (Percent) 10 8 6 4 2 0 -2 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 -4 Data source: Federal Reserve Board Forecast: Mountaintop Economics & Research Inc. 12 12 Month Moving Avg. The total U.S. output of medical equipment and supplies expanded by 4 percent in the third quarter when compared with the same quarter in 2012. That would be pretty decent growth for most industries at this stage of the recovery, but for the medical industry it means that the growth in overall production levels is decelerating. Total output of these products grew by 6.5 percent for all of 2012, and the rate of expansion was 7 percent through the first half of this year. Our forecast calls for a gain of at least 6 percent in 2013, but the trend of gradual deceleration in the growth rate will persist through most of next year. Our current forecast calls for a rise of 3 percent in 2014. As the chart shows, this industry follows a cyclical pattern with peaks and troughs timed at about two years apart. This suggests that the next cyclical peak in the growth rate will occur in the middle of 2015. The good news is that while the growth rate may fluctuate on a cyclical basis, the cyclical lows have never been severe, even during recessions. On average, this industry has grown by a solid 4 percent per year since 2001. The long-term demographic trends in the U.S. suggest that this industry will continue to grow at a solid rate for the foreseeable future. The most significant factor in the short term will likely be Obamacare. If things go as planned (a Trend in Motor Vehicle Assemblies Remains Robust 8 percent, and Nissan is enjoying a 9-percent gain. The biggest percentage gain goes to Subaru, which has seen a jump of 28 percent this year. Luxury brands also are doing well: Porsche sales are up 24 percent, Jaguar receipts are up 19 percent, and Mercedes-Benz and BMW sales show a 13-percent bump. U.S. Motor Vehicle Monthly Assemblies Millions of Units, Annual Rate 12 11 10 9 8 7 6 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 5 FOR MORE INFORMATION: Bill Wood, MoldMaking Technology's Economics Editor / Mountaintop Economics & Research Inc. 413-772-6436 / billwood@plasticseconomics.com / plasticseconomics.com 46 MoldMaking Technology December 2013 Data source: Federal Reserve Board Forecast: Mountaintop Economics & Research Inc. 13 12 Month Moving Avg. The total number of motor vehicles assembled in the U.S. expanded by 9 percent in the third quarter when compared to the same quarter in 2012. The auto industry remains on a pace to get to a total of 11 million assemblies for 2013. This would represent a gain of 7 percent over the 2012 total of 10.3 million units assembled. We expect this uptrend to continue through at least the next 12 months, with the total exceeding 12 million units in 2014. As the chart shows, that would put the industry back at its pre-recession levels. The robust uptrend in the assemblies data is due to strong underlying consumer demand. For the year to date, total light vehicle sales are running more than a percent above the total from a year ago. Sales of light trucks are up more than 11 percent, while sales of passenger cars are up by nearly 6 percent. For 2013 as a whole, light vehicle sales are expected to total more than 15.5 million units, and there is still plenty of room for growth from here. The employment data in the U.S. are gradually improving, and the economy is expected to gain momentum in 2014. This should spur wage growth, which is a major factor in demand for motor vehicles. Breaking the sales data out by manufacturer, Ford is garnering large gains in market share so far this year. Sales for both General Motors and Chrysler are up over 8 percent, but Ford's sales figures for the year to date have increased by more than 12 percent. Total sales for both Toyota and Honda are up by just over