Cautious consumers, consolidations and unsettled financial markets are the three global trends that will emerge when recession comes to an end, according to Fabricators & Manufacturers Association, International (FMA). 

Factoring in those trends will help U.S. manufacturers better position themselves for growth as the economy starts to come around, which may begin as early as fourth quarter 2009, FMA economic analyst Chris Kuehl, said. 

The latest FMA economic update newsletter, Fabrinomics cites data which shows manufacturing levels in Britain improving, albeit by just 0.2%; while the export data from Germany continues to decline. China is back on pace to grow by 7.5%, but Japan saw a slump in industrial production not seen in 20 years. The United States witnessed a spike in activity and there was a bump in durable goods orders, but at the same time there has been a continued slowdown in industrial demand. 

“The question is whether we are transitioning to a solid growth period or to something flatter,” Kuehl adds. 

“The best that can be predicted at the moment is that three trends are emerging.” 

Cautious consumers 
The recession may have started to fade in the past couple of months, but there has been considerable financial damage and it will be a while before the consumer jumps back in Kuehl explained. “This limits the advance of many sectors: automotive, appliances, major electronics, furniture, and so on. It may be well into 2010 before the consumer really comes back to life.” 

Consolidations 
Major industries are no longer centered in the United States and Europe. This means that the pivot points are now in Asia and, in some cases, Latin America. That makes it mandatory for manufacturers to have footholds and contacts in these markets. That is a big challenge for larger companies, and a very complex situation for smaller ones, Kuehl commented. 

Unsettled financial markets 
“The banks and investment groups are getting back on their feet, but they will be changed institutions when they do recover,” Kuehl said. 

“The old-school banker will be back in vogue, and that banker will have a host of government agencies looming over his shoulder. This means that capital flow will be inhibited, making it harder to expand and invest to accommodate the two previously described trends. 

Cash will remain king for a while longer, and there will be more growth through mergers than from organic expansion.” 

What this means for manufacturers 
For manufacturers, the implications vary, all depending on where a company sits within a given sector. Kuehl concluded: “This is the dangerous moment when competitors make their moves and a company without some strategic sense of how to organize often finds itself constantly on the defensive, reacting to attacks by competitors. 

“Manufacturers are in a more challenging position, as they also have to puzzle out what their consumers are thinking if they want to keep servicing them.”