Our comprehensive assessment of the United States' operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect the United States, as well as the latest industry developments that could impact the United States' industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in the United States before your competitors.
United States Country Risk
The US economy will accelerate slightly this year, with real GDP growth increasing to 2.1% from 1.9% in 2013. Stronger contributions from personal consumption expenditure growth will be offset somewhat by slower fixed investment growth and a contraction in government spending, as well as a negative contribution from net exports.
The federal government's fiscal accounts will show another year of substantial improvement, due to stronger revenue collection and continued fiscal restraint due to the budget sequester. We forecast the deficit will narrow to 3.0% of GDP from 4.0% of GDP in 2013.
Stronger domestic oil and gas production will reduce the need for imported energy again in 2014, but this dynamic will be offset by accelerating domestic economic activity, which will boost imports. We forecast a 2.2% of GDP current account...
United States Industry Coverage (22)
United States Agribusiness
Agribusiness Market Value BMI Market Value By Commodity (2010-2018)
BMI View: Production growth in the grain s sector will be excellent in 2013/14 owing to record yields. However, farm incomes will be significantly lower given decreases in prices. That said , the grains sector looks relatively positive compared with livestock, where production will be flat...
United States Autos
While our view that the light vehicle market would return to 16mn units in 2014 and that the light truck market would outperform still very much hold true, the strength of demand has surpassed initial expectations. Incentives and discounts during the inventory-clearing summer months, coupled with affordable credit have resulted in total light vehicle sales for 8M14 of 11.185mn units, up 5.1% y-o-y. Within that total, passenger car sales were up 1.2% y-o-y and light truck sales continue to dominate with growth of 9.0% y-o-y.
Early estimates suggest that September will be another strong month and as such we have revised our forecast for the full year upward. The passenger car element remains the same, with a projection of 2.0%. However, we have revised up the light truck forecast from 5.0% to 8.0%, with the slightly lower rate than current sales taking into account the winding down of production of the Ford F-150 before the launch of its new...
United States Consumer Electronics
BMI Â View : Â The US consumer electronics market is a global leader in terms of market size and adoption of the latest technology - with high penetration rates in most device categories . Despite the maturity of the market BMI believes significant opportunities remain in emerging product categories, as well as the result of a high replacement rate in key categories such as smartphones . Growth areas include large-size HD Â and UHD TV sets,...
Defence & Security
United States Defence & Security
BMI View: We believe that the United States defence budget will be re-orientated to take account of the threat from the Islamic State of Iraq and Syria (ISIS). This will in our view stimulate procurement plans as the country can now focus on obtaining arms and technologies that might have previously been decided against due to austerity. The main focus of these procurements Â being the development of the F-35 Lightning II Joint Strike Fighter program, which has been hit by another delay.
ISIS is posing a major security risk to US allies in the Middle East, following its occupation of a considerable quantity of the northern regions of...
Food & Drink
United States Food & Drink
The US economy will continue to strengthen in 2014, due to sustained improvement in the labour market that will fuel an acceleration in private consumption. We will continue to see positive - although slowing - fixed investment growth this year, and we believe the drag on growth from government expenditure will lessen compared to last year. However, we have revised down our 2014 growth forecast from 2.4% to 2.1% due to a particularly weak Q114. Indeed, real GDP contracted at a seasonally-adjusted, annualised rate of 2.9% in the first quarter of the year, the largest contraction during a period of economic growth in decades. That said, the downward revision is attributable to base effects from Q1 and does not suggest the start of a major slowdown. We believe many of the contributing factors have already begun to recede, suggesting a much stronger second quarter.
Headline Industry Forecasts (local currency)
United States Freight Transport
BMI maintains its positive outlook for the US freight transport sector. Despite a fairly weak start to the year across a range of macroeconomic indicators, we maintain our forecast for US real GDP growth to accelerate to 2.8% in 2014 from 1.9% in 2013. Our view for gradual strengthening in the US economy through to the end 2014 continues to play out, driven by a tightening labour market and sustained growth in the cyclical components of the economy, notably the residential housing sector and business investment in equipment. On the back of this BMI maintains its cautiously positive outlook on the US freight sector.
A steady improvement in consumer confidence reinforces our view that private consumption will accelerate in 2014. Consumer confidence levels are at post-financial crisis highs, and the employment-to-population ratio hit 59.0% in June 2014, the highest reading since August 2009. We...
United States Information Technology
BMI View: Â The outlook for Â US IT spending remains strong when compared to the majority of developed markets over the medium term , as a result of stronger economic performance and a greater interest from enterprises in the latest products and solutions . Cloud computing, real-time enterprise software, security and big data are all areas of spending in which we expect to see strong growth , particularly in the latter years of our forecast . the retail...
United States Infrastructure
BMI View: Â We have upgraded our 2014 and 2015 outlook for US construction sector growth to 3.0% and 1.5% respectively , but maintain our view the recovery will trend lower as the residential construction industry normalises. The potential for any major ramp - up in infrastructure investment remains unlikely in the current political climate, but any improvement here would present upside to our five - year growth outlook.
The residential construction sector continues to expand. As expected, data has been and will continue to be mixed. However, overall the trend is for continued recovery in the sector. Housing starts, homebuilder confidence and permits are all...
United States Insurance
BMI View: Â The most recent results from the leading players in the life and the non-life segments of the United States' insurance sector confirm that gross written premiums have been growing at steady single-digit rates and Â will continue to do so for most lines . These rates are driven forward in the coming years by economic growth, increased activity in particular sectors, firming price s and re lative absence of claims costs. Furthermore, in the life segment, significant opportunities arise from the tens of millions of households who are...
United States Medical Devices
Espicom Industry View : The US medical market is forecast to see steady growth over the next five years, despite the impact of the newly introduced Medical Device Excise Tax and uncertainties within the healthcare system in the wake of the Patient Protection and Affordable Care Act. Imports have been growing in line with the market, which remains by far the world's largest. Exports are continuing to rise as US manufacturers seek out opportunities in emerging global markets.
Headline Industry Forecasts
At an estimated US$125.4bn in 2013, the US medical device market is the world's largest. Per capita expenditure, at US$392, is the second highest in the world, behind only Switzerland. The market is projected to grow at a CAGR of 6.1% over the 2013-2018 period, as it settles down into a more consistent pattern after the volatile 2008-2013...
United States Metals
BMI View: Â The US metals sector will see modest Â growth over the next several years . Accelerating economic expansion Â will encourage me tal production and consumption, but total production and consumption levels will remain below pre-crisis levels through 2018.
Accelerating real GDP growth in the coming quarters will lead to modest growth in the metals sector.Â We now forecast real GDP growth of 2.7% in 2015, up from our previous forecast of 2.6%, and estimate growth of...
United States Mining
BMI View: Â The Â US mining industry will remain among the largest in the world, but will see just modest expansion to 2018 . Â The bulk of mineral output and mining investment in the Americas region will occur in developing markets in Latin America. Still, the US's mining industry value will reach US D13 5 bn in 2018 as the country's stable economic and political environment, coupled with its long history of mining and its...
Oil & Gas
United States Oil & Gas
BMI View: Â The US will continue to lead gains in non-OPEC crude oil production in the coming years. We forecast crude oil and NGLs production will rise from an estimated 12.2 b/d in 2014 to 14.7mn b/d in 2023. B reakneck growth seen in recent years will moderate through our 10-year forecast period , reflecting abrupt depletion rates in shale oil fields, a glut in the domestic market for light sweet crude and lower oil prices dampening some production . Consumption for fuels will be stagnant as energy efficiency gains take root. On the gas market, we forecast a ramp - up in production when demand gears up 2017 onwards as new LNG and pet...
United States Petrochemicals
BMI View: The US petrochemicals industry continues to expand on the back of growth in ethane availability as a result of shale gas exploitation. With exports and domestic demand growing, industrial growth is firming up and giving a positive scenario over the medium Â term. However, a glut in global capacity as a result of new crackers in the US will put pressure on margins in the long Â term.
According to data from the American Chemistry Council (ACC) US production of major plastic resins totalled 2.9mn tonnes during July 2014, a decrease of 1.2% y-o-y. For the January-July period, production fell 1.3% y-o-y to 20mn tonnes. Sales and captive use of major plastic resins totalled 3.1mn tonnes during July 2014, an increase of 6.5% y-o-y, while for the first seven months of the...
Pharmaceuticals & Healthcare
United States Pharmaceuticals & Healthcare
BMI View: The US pharmaceutical market presentsÂ strongÂ commercial opportunitiesÂ acrossÂ the industry. Total US pharmaceutical sales reached USD347.2bn in 2013 - more than three times the size of its nearest rivalÂ Japan. The US boasts the largest individual markets across the three core sub-sectors:Â patented, generic and over-the-counter medicines. State-level pharmaceutical markets in the country are larger than many country-level pharmaceutical markets. Â
Headline Expenditure Projections
Pharmaceuticals : USD347.2bn in 2013 to USD352.8bn in 2014; 1.6% growth in local currency terms. Forecast unchanged from Q314.
Healthcare : USD2,918bn in 2013 to USD3,112bn in 2014; +6.7% growth...
United States Power
BMI View: Â C oal's role as the pre - eminent fuel for electricity generation in the US has lessened gradually, and we anticipate that its share will dwindle further over our forecast period . Low natural gas prices will continue to drive this shift, as will a growing emphasis on renewables and more stringent EPA emissions regulations.
The dynamics governing the US power market continue to be driven by the country's shale gas boom, with low gas prices set to determine the composition of the energy mix. While gas remains cheap, the longer-term outlook for utilities that operate coal-fired and...
United States Real Estate
Stable economic growth, paired with strengthened consumer confidence,Â has provided a steady upturn in all three commercial real estate sectors over the course of 2014. With the economic recovery expected to gain pace in 2015, we maintain our bullish view for the country's commercial real estate market.
With a focus on the cities of New York, Los Angeles, Chicago, Dallas and Philadelphia, this report covers the rental market performance in terms of rates and yields and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the economy on a market that can dictate regional performance. In this respect, we generally expect the stable growth of 2014 to continue going into 2015 with moderate-to-strong growth in all sectors. Reasons for this positive outlook are solid growth indicators of the wider US economy, rising employment rates, as well as growing consumer...
United States Renewables
BMI View: The prospects for renewable energy in the US have strengthened late ly , as the Obama administration shows continued c ommitment to climate change and green energy policies. Further, EPA emissions regulations governing existing US power plants have the potential to boost the US renewables market significantly. We have now upwardly revised our solar and wind forecasts over the last six months to take into account the improved market conditions for renewables in the US.
The sheer size of the US's renewables industry, in terms of installed capacity and generation, is undeniable. A high level of investment, encouraged by government subsidies and state-level renewable energy targets, has enabled the sector to expand rapidly over the past decade, driving the country to become a global renewables...
United States Shipping
BMI maintains its cautiously optimistic view on the US shipping sector. After estimated contractions in TEU throughput at both the port of Los Angeles and the Port of New York/New Jersey in 2013, we forecast a return to growth in 2014 at both facilities.Â Our view for gradual strengthening in the US economy through end 2014 continues to play out, driven by a tightening labour market and sustained growth in the cyclical components of the economy, notably the residential housing sector and business investment in equipment.
The US economy will accelerate slightly this year, with real GDP growth increasing to 2.1% from 1.9% in 2013. Stronger contributions from personal consumption expenditure growthÂ will be offset somewhat by slower fixed investment growth and a contraction in government spending, as well as a negative contribution from net exports.Â We believe risks are weighted to the upside across the US economy. The...
United States Telecommunications
BMI View : Â The mobile market has become the focus of att ention once again after France-b ased Iliad launched a USD15 bn unsolicited offer for 57% of fourth-ran ked T-Mobile US . The offer pre-empted an equally audacious offer reportedly prepared by Softbank -backed Sprint . Although T-Mobile rejected Iliad's offer, it was made clear that a superior financial offer would be considered. The fate of T-Mobile US seems likely to be sealed by the end of 2014. We believe Iliad...
United States Tourism
BMI View : Â The Q1 2015 US tourism reports highlights our positive view of the industry, which is benefiting from strong fundamentals and an uptick in the US economy. We expect tourist arrivals to reach 65.2mn in 2015, growing by 4.4% annually.
With the US economy forecast to grow by 2.7% in 2015, up from 2.3% in 2014, the tourism industry is continuing to expand strongly. A report from the US Department of Labor in October 2014 found that the industry had added 8,700 jobs in September, with the industry as a whole having outpaced job creation in the wider economy since the employment recovery began. This positive indicator is set to continue in 2015, with the US Department of Commerce expecting international visitors to grow by 5.9% for full-year 2014, marking an upwards revision of its previous estimate.