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Economist has upbeat message for machine-vision executives
January 31, 2008
Orlando, FL. Talk of recession and depression is way overblown—that’s the message that Lawrence Chimerine delivered to executives attending the Automated Imaging Association’s 16th annual business conference, held here this week. “You won’t hear doom and gloom from me,” the economist from Radnor International Consulting said, although he did suggest that it would be prudent for AIA members to adjust to structural changes in the global economy.
He called those changes extraordinary and not widely understood. The key driver is globalization and the attendant integration of economies around the world. In virtually every country today, he said, you’ll find more industry and more competition. That’s in part, he said, because once closed markets like China are opening up, responding to outside pressure from trade organizations and to inside acknowledgement of the benefits that competition can bring. “Competition is great,” he said, “because it broadens everybody’s horizons.”
An effect of globalization, he said, is that central banks have reduced relevance. Wal-Mart, he said, does more to limit inflation than does the Federal Reserve.
What all this means for machine-vision manufacturers, he said, is that it’s very hard to raise prices, despite 3% to 4% annual increases in costs (labor, health care, raw materials, and so on). In fact, he said, oil, metals, agricultural products, and other commodities represent the one area in which prices continue to rise. To cope, he said, manufacturers relying on such commodities must improve their efficiencies 3 to 4% each year.
He noted that agricultural prices are increasing, driven by increased food demand from developing countries and by the shift of cropland from food production to energy production (that is, ethanol). He did say he believes oil is overprices right now and expects prices to fall.
His specific advice to AIA members? Create new and innovative products, find new applications for existing products, control your costs, and carefully and continually monitor what you are doing. Planning, he said, is not a once-per-year activity.
As for specific market niches, he said the semiconductor industry will be fast growing for many years to come because semiconductors are pervasive in so many other industries.
Posted by Rick Nelson on January 31, 2008 | Comments (0)
