Mr. Lucas: From a business perspective, things are going fairly well, despite what you might read in the headlines every day. The further you get away from the financial and consumer epicenter of business, which is struggling, the rest of the world, particularly on the industrial manufacturing side, is faring relatively well. What we're seeing is continued sluggishness in the US, although it is still growing modestly, but the weak dollar is definitely helping out from an export standpoint. We're seeing very strong international business across the board from the industrial companies that we monitor.
TWST: Why the dichotomy?
Mr. Lucas: I think there are a couple of things going on. Number one, as I said
in the opening remark, financial and consumer businesses are having a lot of
issues right now. A lot of the growth that has taken place over the last decade
was on the housing side, and as a result you had access to a lot more credit for
the consumers. There was higher discretionary spending, but whether it is fewer
jobs, less overtime, higher fuel prices or food inflation, clearly people's
wallets are being stretched more thinly now. At the same time, consumers still
have the basic needs that are out there, but it's more discretionary spending
that has been cut back.
When we look on the industrial side, a lot of the international growth is coming
from infrastructure investments. As I said earlier, while there is a need to
repair the infrastructure in the US, what we see internationally, especially in
a lot of the emerging markets, is the need to build infrastructure, so whether
it's China, India, Vietnam or Eastern Europe, you're seeing very good GDP
growth. For that to continue requires infrastructure that a lot of these
countries do not have and that's driving much of the growth. Whether it is
cranes from Manitowoc (MTW) or earthmoving machines from Caterpillar (CAT) or
test equipment from Danaher (DHR), there is a lot of need for a variety of
products that these companies make.
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