b'YOUR TOOLKIT FOR BUILDING EXCELLENCEMacroeconomic OutlookIndustry Snapshots The majority of leading indicators that we trackincluding the ITR Leading Indicator, the US ISM PMI (Purchasing Managers Index), Arrow denotes 12-month moving total/average direction. and the US Total Industry Capacity Utilization Ratesignal that Macroeconomic Outlookmany sectors of the US economy will continue to trend on the Industry Snapshots The majority of leading indicators that we trackincluding th trial back side of the business cycle. These sectors include US Induse ITR Production, US Total Retail Sales, and US business-to-businessLeading Indicator, the US ISM PMI (Purchasing Managers Index), (B2B) and the US Total Industry Capacity Utilization Ratesignal th ury Arrow denotes 12-month moving total/average direction. spending. Our analysis of the inverted 10-year to 3-month Treasat RETAIL SALESmany sectors of the US economy will continue to trend on the yield curve, which reaches further out, suggests that these sectors back side of the business cycle. These sectors include US Induswill reach cyclical lows around late 2024. The magnitude of thetrial Production, US Total Retail Sales, and US business-to-business cyclical downturn will differ by sector, but it will be generall(B2B) y mild spending. Our analysis of the inverted 10-year to 3-month Treasury RETAWIL HSOALLEESSALE TRADE relative to historical trends.yield curve, which reaches further out, suggests that these sectors will reach cyclical lows around late 2024. The magnitude of the ering Rising interest rates, alongside economic uncertainty, are hind cyclical downturn will differ by sector, but it will be generallsome firms capex investments. This will contribute to ongoing y mild WHOLAEUSTAOL PE RTORADDUECTION relative to historical trends.slowing growth and eventual contraction in B2B spending. We expect annual US Nondefense Capital Goods New Orders (excluding Rising interest rates, alongside economic uncertainty, are hind hen aircraft), a measure of B2B spending, to peak in mid-2023 and tering some firms capex investments. This will contribute to ongoing AUTOM PARNOUDFUACCTTIUORNING declineapproximately 5% altogetherthrough the end of 2024. slowing growth and eventual contraction in B2B spending. We expect annual US Nondefense Capital Goods New Orders (excludingAnnual US Total Manufacturing Production, which accounts foraircraft), a measure of B2B spending, to peak in mid-2023 and talmost 80% of US Industrial Production, has edged downward hen declineapproximately 5% altogetherthrough the end of 2024 e MANURFOATCATRUYR RINIGG in two of the last three months, and we expect decline to be th. overarching trend into the latter half of 2024. By contrast, overall Annual US Total Manufacturing Production, which accounts for Industrial Production, which is benefiting from mining activity, is almost 80% of US Industrial Production, has edged downward hovering around record-high levels. Annual Industrial Production ROTACRAYP RIITGAL GOODS will peak in the latter half of this year and then declineabe out in two of the last three months, and we expect decline to be thoverarching trend into the latter half of 2024. By contrast, ov2.7% in allinto the end of 2024. Industrial sector decline werall ill be Industrial Production, which is benefiting from mining activity,cushioned by elevated backlogs and near-term reshoring trends. is hovering around record-high levels. Annual Industrial Production CAPITNAOLN GROEOSIDDSENTIAL CONSTRUCTION will peak in the latter half of this year and then declineab of We expect annual US Total Retail Sales to peak around the end out 2.7% in allinto the end of 2024. Industrial sector decline wthis year, then decline, about 1% or less, into the latter halfill beof 2024. cushioned by elevated backlogs and near-term reshoring trends.Consumer financials are stable, with credit delinquencies below the UCCTTIIOONN 2019 level and US Real Personal Income (excluding current transfer NONRREESSIIDDEENNTTIIAALLCCOONNSSTTRRU We expect annual US Total Retail Sales to peak around the ende receipts) at record highs. However, savings are not keeping pacof this year, then decline, about 1% or less, into the latter halfwith inflation; we are monitoring this downside risk to the outl of 2024. ook.Consumer financials are stable, with credit delinquencies below the Rising interest rates, alongside economic uncertainty, are RESIDENTIAL CONSTRUCTION 2019 level and US Real Personal Income (excluding current transfer hindering some firms capex investments.receipts) at record highs. However, savings are not keeping pace SteepMild Rise Flat MildSteepwith inflation; we are monitoring this downside risk to the outlook.Rise Decline Decline Our outlook for relatively mild macroeconomic, industrial, and Rising interest rates, alongside economic uncertainty, are retail sales downturns in 2024 assumes that the inversion of the hindering some firms capex investments.yield curve will not extend beyond this year. Recent comments by SteepMild Rise Flat MildSteepFederal Reserve Chair Jerome Powell suggest that the Fed could Rise Decline Decline Our outlook for relatively mild macroeconomic, industrial, and maintain a hawkish stance for longer than originally expected, retail sales downturns in 2024 assumes that the inversion of th d which could jeopardize that assumption. If so, the economy woule face higher hurdles, which could result in more severe or longey yield curve will not extend beyond this year. Recent comments b r-Federal Reserve Chair Jerome Powell suggest that the Fed could lasting downturns than we are currently forecasting. We are maintain a hawkish stance for longer than originally expected, closely monitoring the Feds actions and the potential risks to our which could jeopardize that assumption. If so, the economy would forecasts.face higher hurdles, which could result in more severe or longer-lasting downturns than we are currently forecasting. We are closely monitoring the Feds actions and the potential risks to our forecasts.ITReconomics.com 2023 All Rights ReservedITReconomics.com ME BUILDER - MAR2023 / 41FRA 2023 All Rights Reserved'