Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
MACROECONOMIC SCORECARD: THE AMERICAS Presented by: Doug Hermanson Economist March 2013 Current Retail Conditions Consumer spending challenged by flagging confidence Summary of Macro Factors Affecting Retail* Q4 2012 or Latest Available Month* The Americas Country Brazil Indicators Canada Mexico United States GDP, Annualized Growth Rate* Residential & Business Investment* Consumer Spending* Retail Sales Consumer Confidence CPI Headline Index CPI Food Index CPI Core Index █ = IMPROVING █ = MIXED █ = WORSENING 2 * GDP, Investment and Consumer Spending are quarterly through fourth quarter of 2012; Remaining indicators are monthly through January, February or March 2013 • Brazil’s growth pickup threatened by inflation, weak investment • Mexico’s strong retail growth is trending weaker • Canada slowed by weak exports, confidence; helped by low inflation • U.S. is holding up © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 2 The Macro Outlook for Retailing in the Americas Slow growth trend shaped by inflation, U.S. uncertainty • As the region’s major trade partner, the U.S. will shape the outlook • Depends on gov’t tax/spend issues • Canada adds to the risks with its own housing, debt issues • Brazil, Mexico 2013 prospects challenged by trade outlook, price pressures; but potential still strong in long-term Source: Kantar Retail Short Term (6–12 months) Long Term (2–5 years) Economy constrained by price pressures, gov’t fiscal/monetary policies Weakness amid retreating housing market, elevated debt levels, weak exports Growth slowed by U.S. impact, inflation concerns. But outpacing region’s other economies Weakness/threats offset by persisting gains in housing, investment, hiring Long-term growth will hinge on ability to keep price pressures in check Extent of stronger growth depends on avoiding housing/debt bubble Growth prospects relatively strong as rising costs cause U.S. firms to shift trade closer to home Growth kept modest by constraints on income growth, price pressures Extent of region’s slower growth depends on impact Net Outlook of inflation in Mexico/ Brazil, and U.S. prospects Steady-to-strong growth outlook led by commodity markets. Dampened by inflation & U.S. gov’t. cuts Brazil Canada Mexico United States © Copyright 2013 Kantar Retail 3 Summary Conclusions and Implications • Short vs. Long Term. Expect retail demand to remain on a modest and uneven path in the short term. When global growth shifts into a higher gear will be determined most by the euro debt crisis and emerging markets, likely in 2014 or beyond. • Prices/Costs. Plan on global cost pressures that remain relatively modest for most markets in 2013 as a result of moderate global demand growth in the short term. • The Americas. Plan for slower or modest growth in Mexico, Canada and Brazil in the short term. • Canada and Mexico facing modest/weak export demand from U.S. • Brazil’s price pressures will be drag and present big downside risks • Canada also is grappling with frothy housing and debt markets • United States. Expect U.S. retail sales growth to keep a respectable pace, but a notch below last year. © Copyright 2013 Kantar Retail 4 The Americas: GDP Trends Mixed in Q4 Growth picks up in Brazil, Mexico; weakens in U.S., Canada • Brazil’s Q4 gain was mixed; weak investment still a challenge • Mexico likely to let up some, but still outpace others The Americas: Inflation-Adjusted GDP Qtr-to-Qtr Growth, Seasonally-Adjusted Annualized Rate 2012.2 2012.3 2012.4 3.1% 3.1% 1.3% 1.5% 1.3% 2.2% 3.1% 1.5% 0.4% 1.9% 0.7% 0.6% • Softness in Canada • Underlying U.S. growth trends stronger than suggested in Q4 United States Brazil Mexico Canada © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 5 The Americas: Big Growth Range for Retail Sales Brazil, Mexico letting up; growth weak in Canada • Brazil and Mexico’s retail sales letting up from very strong pace • U.S. holding at a steady pace is encouraging given uncertainty • Canada dragged weaker by homegoods channels The Americas: Nominal Retail Sales Year-to-Year Percent Change**; Not Adjusted for Inflation* 15% 13% Brazil 11% 9% Mexico 7% 5% United States 3% Canada 1% -1% Mar-11 Mar-12 •Through January, except the United States is through February **Growth is a three-month moving average © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 6 The Americas: Price Inflation Trends Diverge Inflation rising at a dangerous pace in Brazil • Brazilian inflation signals need to slow or change economic policy The Americas: Consumer Price Inflation Year-to-Year Percent Change, Through February 15% 13% 11% • Mexico’s price pressures have tailed off, but may be picking back up 9% 7% Brazil 5% Mexico • This contrasts with 3% modest inflation in 1% Canada, United -1% States—despite Mar-11 recent uptick United States Canada Mar-12 © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 7 The Americas: Core Price Trends U.S. and Canada are a contrast to Mexico, Brazil • Brazil’s core inflation trend is less alarming, but still elevated The Americas: Core Consumer Price Inflation Year-to-Year Percent Change, Through February 15% 13% 11% • Mexico’s inflation may be letting up in terms of core prices excluding food, fuel • U.S. and Canada trends much more benign; boosts unit demand 9% 7% 5% Brazil Mexico 3% United States 1% -1% Mar-11 Canada Mar-12 © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 8 The Americas: Consumer Confidence Brazil trending weaker; Canada, U.S. volatile, if not weaker • U.S. confidence volatile in face of tax/spend issues The Americas: Consumer Confidence Indices through February* Brazil 120 • Canada holding up 100 despite weak housing, U.S 80 concerns • Brazil confidence sagging amid weaker retail sales, elevated inflation • Mexico holding up Mexico Canada 60 United States 40 20 Apr-11 Apr-12 •Through February, except the United States is through March © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 9 Current Retail Conditions: Brazil, Mexico The Americas: Selected Indicators • Brazil and, to lesser degree, Mexico show troubling signs in terms of inflation indicators 1 • Brazil also is showing weak investment trends as rising wages dampen competitiveness • These factors may increasingly hurt retail sales growth Q4 2012 or Latest Available Month █ = IMPROVING █ = MIXED █ = WORSENING 2 Growth Q-to-Q or Chg Chg Q-to-Q Period Y-to-Y M-to-M Y-to-Y or M-to-M GDP (Inflation-Adjusted), Annualized Growth Rate Q4 '12 3.3% 3.1% 0.0% 1.6% Residential & Business Investment (Inflation-Adjusted) Q4 '12 3.5% -2.0% -2.1% -3.3% Consumer Spending (Inflation-Adjusted) Q4 '12 3.5% 4.4% 1.4% -0.5% Retail Sales 1,2 Jan-13 6.0% 0.1% -1.0% 1.1% Consumer Confidence (Points) 1 Feb-13 4.9 0.2 -0.6 -0.2 CPI Headline Index, Not Seasonally Adjusted (NSA) Feb-13 3.6% 0.5% 0.3% 0.1% CPI Food Index, Not Seasonally Adjusted (NSA) Feb-13 5.6% 0.1% 0.3% -0.1% CPI Core Index, goods excluding food and fuel (NSA) Feb-13 3.3% 0.1% -0.4% 0.0% Brazil Growth Q-to-Q or Chg Chg Q-to-Q Period Y-to-Y M-to-M Y-to-Y or M-to-M GDP (Inflation-Adjusted), Annualized Growth Rate Q4 '12 1.4% 2.2% 0.5% 0.7% Residential & Business Investment (Inflation-Adjusted) Q4 '12 -4.4% 1.9% 1.2% 9.2% Consumer Spending (Inflation-Adjusted) Q4 '12 3.8% 4.7% 0.3% 0.6% Retail Sales 1 Jan-13 12.3% 0.8% -1.2% 0.1% Consumer Confidence (Points) 1 Feb-13 -0.7 -1.3 -1.4 0.0 CPI Headline Index, Not Seasonally Adjusted (NSA) Feb-13 6.8% 0.5% 0.1% -0.4% CPI Food Index, Not Seasonally Adjusted (NSA) Feb-13 13.4% 1.6% 1.5% -0.5% CPI Core Index, excluding food and fuel (NSA) Feb-13 5.6% 0.3% -0.3% -0.4% 1 A three-month moving average is used to smooth out volatility in consumer confidence and retail sales 2 Estimated by Kantar Retail based on reported inflation-adjusted growth Y-to-Y = Year-over-Year change; Q-to-Q = change from prior quarter; M-to-M = change from prior month. Chg Y-to-Y = rate of Year-over-Year change in percentage points; Same for quarterly and monthly growth. All data is seasonally adjusted unless indicated by "NSA" or Not Seasonally Adjusted Mexico © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 10 Current Retail Conditions: Canada, U.S. The Americas: Selected Indicators • Weak exports and homebuilding a drag on Canada 1 • U.S. positive in some key measures, but tax/spend issues have tripped up confidence • Muted core and food price inflation is a positive for unit demand growth in both countries Q4 2012 or Latest Available Month █ = IMPROVING █ = MIXED █ = WORSENING 2 Growth Q-to-Q or Chg Chg Q-to-Q Period Y-to-Y M-to-M Y-to-Y or M-to-M GDP (Inflation-Adjusted), Annualized Growth Rate Q4 '12 1.1% 0.6% -0.4% -0.1% Residential & Business Investment (Inflation-Adjusted) Q4 '12 3.1% 2.9% -0.1% 4.9% Consumer Spending (Inflation-Adjusted) Q4 '12 2.0% 2.7% 0.1% -0.1% Retail Sales Excluding Auto & Fuel Channels 1 Jan-13 0.4% 0.0% -0.3% 0.2% Consumer Confidence (Points) 1 Feb-13 5.6 -2.2 -3.5 -7.3 CPI Headline Index Feb-13 1.2% 1.2% 0.7% 1.1% CPI Food Index Feb-13 1.9% 1.0% 0.8% 0.7% CPI Core Index Feb-13 1.4% 0.8% 0.4% 0.8% United States Growth Q-to-Q or Chg Chg Q-to-Q Period Y-to-Y M-to-M Y-to-Y or M-to-M GDP (Inflation-Adjusted), Annualized Growth Rate Q4 '12 1.7% 0.4% -0.9% -2.7% Residential & Business Investment (Inflation-Adjusted) Q4 '12 7.2% 14.0% 1.0% 13.1% Consumer Spending (Inflation-Adjusted) Q4 '12 1.8% 1.8% 0.0% 0.3% Retail Sales Excluding Auto & Fuel Channels 1 Feb-13 4.1% 0.4% 0.1% -0.1% Consumer Confidence (Points) 1 Mar-13 -5.5 -2.3 -3.9 -1.2 CPI (Headline Index) Feb-13 2.0% 0.7% 0.4% 0.7% CPI Food Index Feb-13 1.2% 0.1% 0.1% 0.1% CPI (Core Index, excluding food and fuel) Feb-13 2.0% 0.2% 0.1% -0.1% 1 A three-month moving average is used to smooth out volatility in consumer confidence and retail sales 2 Estimated by Kantar Retail based on reported inflation-adjusted growth Y-to-Y = Year-over-Year change; Q-to-Q = change from prior quarter; M-to-M = change from prior month. Chg Y-to-Y = rate of Year-over-Year change in percentage points; Same for quarterly and monthly growth. All data is seasonally adjusted unless indicated by "NSA" or Not Seasonally Adjusted Canada © Copyright 2013 Kantar Retail Source: Statistics Canada, Mexico (INEGI), Brazilian Institute of Geography and Statistics, U.S. Department of Commerce and Kantar Retail 11 Frank Badillo Chief Economist Doug Hermanson Economist KRIQ T: +614.355.4019 F: +614.355.4059 T: +614.355.4044 F: +614.355.4059 245 First Street www.KantarRetailiq.com Floor 10 F +1 617 Insights 499 2723 Cambridge, MA website: Macroeconomics www.KantarRetailiq.com 02142 Topics & Trends > Macroeconomics © Copyright 2013 Kantar Retail