winds of change - the vision council · winds of change. the vision council. brian beaulieu ceo....
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Winds of Change
The Vision Council
Brian BeaulieuCEO
First in Forecasts Since 1948
ITR Economics provides the best economic intelligence to reducerisk and drive practical and profitable business decisions.
Duration Accuracy
US GDP (data through Sep) 24 98.5%
US Ind. Prod. (Dec) 24 96.8%
Eur Ind. Prod. (data through Nov) 11 99.2%
Canada Ind Prod (data through Oct) 12 98.1%
China Ind Prod (data through Nov) 17 99.1%
Retail Sales (data through Dec) 16 99.4%
Housing (data through Nov) 15 97.5%
Employment (data through Dec) 23 99.3%
Preliminary 2017 Forecast ResultsIf you heard ITR a year ago… 2
First in Forecasts Since 1948
Revenue Data Trends, All Divisions
Source: Vision CouncilBillions of Dollars
3
0.0
0.5
1.0
1.5
2.0
0.0
3.5
7.0
10.5
14.0
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
RX LensesOphthalmic FramesPlano (Non-Rx) SunglassesOTC Magnifying Readers
3/12 12/12Lenses -1.2% -2.1%Frames 0.1% 0.0%Sunglasses -2.2% 0.4%Readers 0.9% 0.8%
Readers Bils $All Others Bils $
First in Forecasts Since 1948
US Real Gross Domestic Product
Source: BEA3MMA
4
10
12
14
16
18
20
10
12
14
16
18
20
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
Sep '15 ForecastAug '17 Forecast GDP - 3MMA
First in Forecasts Since 1948
US Industrial Production to Gross Domestic Product
Sources: FRB, BEAYear-over-Year, Quarter-to-Quarter (3/12)
5
-6.8%-2.9%
-5.3%
-15.5%
3.4%
-16
-12
-8
-4
0
4
8
12
-16
-12
-8
-4
0
4
8
12
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
GDPUS IP
GDPUS IP
First in Forecasts Since 1948
Percent of 2016 World GDP by Country
6
*Total 2016 World GDP: $75.278 Trillion, US$
Data Source: IMF, *67% of R-O-W figures are IMF estimates
First in Forecasts Since 1948
-6
-4
-2
0
2
4
6
-15
-10
-5
0
5
10
15
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
World IP
Indicator
IndicatorWorld IP
World Industrial Production Index to G7 Leading Indicator
Sources: CPB Netherlands Bureau For Economic Policy Analysis, OECDRates-of-Change
7
1/12
12/12
First in Forecasts Since 1948Source: Census Bureau
Does not include immigration into the US8
+207,155-191,367
Net Migration Between States, July 2015-July 2016
First in Forecasts Since 1948
State Population Growth Rates
Source: Census BureauPercent Change from Population Estimates 2010 to 2016
First in Forecasts Since 1948
RawFeb-16 1.5Mar-16 1.5Apr-16 1.4
May-16 1.5Jun-16 1.3Jul-16 1.3
Aug-16 1.6Sep-16 1.6Oct-16 1.5Nov-16 1.7Dec-16 1.6Jan-17 1.5Feb-17 1.7Mar-17 1.7Apr-17 1.6
May-17 1.7Jun-17 1.5Jul-17 1.5
Aug-17 1.9Sep-17 1.7Oct-17 1.7Nov-17 1.9Dec-17 1.7Jan-18 1.7
3/12 Rate-of-Change
= 𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽 2018 3𝑀𝑀𝑀𝑀𝑀𝑀𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽 2017 3𝑀𝑀𝑀𝑀𝑀𝑀
× 100 − 100
=5.34.8
× 100 − 100 = 10.4%
3MMT
4.44.44.44.24.14.24.54.74.84.85.05.05.15.05.04.84.74.95.15.35.35.3
12MMT
18.018.218.418.618.819.019.219.419.719.820.020.220.3
12/12
26.7%25.5%25.2%22.4%20.0%18.3%15.4%12.7%
12/12 Rate-of-Change
= 𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽 2018 12𝑀𝑀𝑀𝑀𝑀𝑀𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽𝐽 2017 12𝑀𝑀𝑀𝑀𝑀𝑀
× 100 − 100
=20.318.0
× 100 − 100 = 12.7%
3/12
15.9%13.6%13.6%14.3%14.6%16.7%13.3%12.8%10.4%10.4%
Data Preparation
DATACAST !
First in Forecasts Since 1948
Rx Lenses Revenue
Source: Vision CouncilBillions of Dollars
11
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1.0
1.5
2.0
2.5
3.0
3.5
4.0
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
12MMT3MMT
12MMT
3MMT
First in Forecasts Since 1948
Rx Lenses Revenue
Source: Vision CouncilRates-of-Change
12
-15
-10
-5
0
5
10
15
20
-15
-10
-5
0
5
10
15
20
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
3/12
12/12
-1.2%-2.1%
First in Forecasts Since 1948
Rx Lenses Revenue to US Total Retail Sales
Sources: Vision Council, Census Bureau12/12 Rates-of-Change
13
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Retail SalesSales
Sales
Retail Sales
First in Forecasts Since 1948
RX Lenses Revenue to Units of Rx Lenses Sold
Source: Vision Council12/12 Rates-of-Change
14
-2.1%-0.2%
-10
-5
0
5
10
-10
-5
0
5
10
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
UnitsSales
Sales
Units
First in Forecasts Since 1948
Ophthalmic Frames Revenue
Source: Vision CouncilBillions of Dollars
15
4
8
12
1
2
3
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
12MMT3MMT
12MMT
3MMT
First in Forecasts Since 1948
Ophthalmic Frames Revenue
Source: Vision CouncilRates-of-Change
16
-15
-10
-5
0
5
10
15
20
-15
-10
-5
0
5
10
15
20
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
3/12
12/12
0.1%0.0%
First in Forecasts Since 1948
Ophthalmic Frames Revenue to US Industrial Production Index
Sources: Vision Council, FRB12/12 Rates-of-Change
17
-15
-10
-5
0
5
10
-15
-10
-5
0
5
10
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Sales
US IP
US IPSales
First in Forecasts Since 1948
Ophthalmic Frames Revenue to US Disposable Personal Income
Sources: Vision Council, BEA12/12 Rates-of-Change
18
-6
-4
-2
0
2
4
6
-9
-6
-3
0
3
6
9
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Sales
Income
IncomeSales
First in Forecasts Since 1948
Ophthalmic Frames Revenue to Units of Ophthalmic Frames Sold
Source: Vision Council12/12 Rates-of-Change
19
0.0%
-0.4%
-9
-6
-3
0
3
6
9
-9
-6
-3
0
3
6
9
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
UnitsSales
Sales
Units
First in Forecasts Since 1948
Plano (Non-Rx) Sunglasses Revenue
Source: Vision CouncilBillions of Dollar
20
0.0
2.0
4.0
6.0
8.0
0.0
0.5
1.0
1.5
2.0
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
12MMT3MMT
12MMT
3MMT
First in Forecasts Since 1948
Plano (Non-Rx) Sunglasses Revenue
Source: Vision CouncilRates-of-Change
21
-25
-20
-15
-10
-5
0
5
10
15
20
25
-25
-20
-15
-10
-5
0
5
10
15
20
25
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
3/12
12/12
-2.2%
0.4%
First in Forecasts Since 1948
Plano (Non-Rx) Sunglasses Revenue to Units of Plano (Non-Rx) Sunglasses Sold
Source: Vision Council12/12 Rates-of-Change
22
-1.0%
0.4%
-20
-15
-10
-5
0
5
10
15
-20
-15
-10
-5
0
5
10
15
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Sales
Units
UnitsSales
First in Forecasts Since 1948
Plano (Non-Rx) Sunglasses Revenueto US Total Retail Sales (nominal $)
Sources: Vision Council, Census Bureau12/12 Rates-of-Change
23
-12
-9
-6
-3
0
3
6
9
-20
-15
-10
-5
0
5
10
15
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Sales
Retail Sales
Retail SalesSales
First in Forecasts Since 1948
OTC Magnifying Readers Revenue
Source: Vision CouncilBillions of Dollars
24
0
0.25
0.5
0.75
1
0.00
0.06
0.13
0.19
0.25
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
12MMT3MMT
12MMT
3MMT
First in Forecasts Since 1948
OTC Magnifying Readers Revenue
Source: Vision CouncilRates-of-Change
25
-10
-5
0
5
10
15
20
-10
-5
0
5
10
15
20
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
3/12
12/12
0.9%0.8%
First in Forecasts Since 1948
US Industrial Production to ITR Leading Indicator™
Sources: FRB, ITR EconomicsUSIP – 12/12 Indicator - Monthly
26
Reported in ITR Trends Report – ITR Advisor
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
IndicatorUS IP
Indicator - MonthlyUS IP - 12/12
First in Forecasts Since 1948
US Purchasing Managers Index
Source: Institute for Supply Management1/12 Rate-of-Change
27
As seen in
9.5%
-50
-25
0
25
50
75
-50
-25
0
25
50
75
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
1/12
First in Forecasts Since 1948
US Non-Manufacturing Purchasing Managers Index
Source: Institute for Supply ManagementAbove 50 Indicates expansion
28
57.0
45
50
55
60
65
45
50
55
60
65
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
MMAR-O-C
Raw Data
12MMA
First in Forecasts Since 1948
US Stock Prices Index
29
29
Source: Wall Street Journal
50
500
5000
50
500
5000
1980 1985 1990 1995 2000 2005 2010 2015 2020
Raw12MMA
First in Forecasts Since 1948
US Treasury 10-Year Bond
Source: US Dept of the TreasuryDaily Treasury Yield Curve Rates
30
1.31.41.51.61.71.81.9
22.12.22.32.42.52.62.7
Oct-'16 Dec-'16 Feb-'17 Apr-'17 Jun-'17 Aug-'17 Oct-'17 Dec-'17 Feb-'18
10-Year Bond
First in Forecasts Since 1948
10-Year Government Bond Yield
Source: FRBPercent
%
0
2
4
6
8
10
12
14
16
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Yield on 10 Year Treasury Note
First in Forecasts Since 1948
US Nondefense Capital Goods New Orders w/o Aircraft
Source: Census BureauBillions of Dollars
9.7%4.6%
$771.8
500
750
1000
1250
1500
-60
-40
-20
0
20
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMTR-O-C
3/1212/12
3MMT12MMT
32
First in Forecasts Since 1948
US Consumer Credit Outstanding Per Capita
Source: FRBAnnual Data Trend in Thousands of Dollars
33
$14.5
0
2
4
6
8
10
12
14
16
0
2
4
6
8
10
12
14
16
'48 '52 '56 '60 '64 '68 '72 '76 '80 '84 '88 '92 '96 '00 '04 '08 '12 '16 '20
Credit Outstanding
First in Forecasts Since 1948
US Auto Loan Delinquency Rate toPercent of US Student Loans Over 90 Days Delinquent to
Real Estate Residential Loan Delinquency Rate
Sources: FRBNY, FRB2012 = 100
4.0
11.2
3.6
0
3
6
9
12
15
0
3
6
9
12
15
'04 '06 '08 '10 '12 '14 '16 '18 '20
PercentagePercentage
AutoStudentResidential 10 Year Avg
10 Year Avg
10 Year Avg
First in Forecasts Since 1948
US Delinquency Rates for Commercial & Industrial Loans
Source: FRBPercent
35
-20.3%0.2%
1.40
2
4
6
8
10
12
14
-200
-150
-100
-50
0
50
100
150
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMAR-O-C
3/1212/12
3MMA12MMA
First in Forecasts Since 1948
US Total Retail Sales to ITR US Retail Sales Leading Indicator
Sources: Census Bureau and ITR EconomicsRetail Sales = 12/12, ITR Retail Sales = Monthly
36
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Retail Sales
Retail Sales Forecast
Indicator - Monthly
IndicatorRetail Sales
First in Forecasts Since 1948
US Total Retail Sales to US Personal Savings as a Percentage of Disposable Income
Sources: Census Bureau, BEA12/12 Rates-of-Change
37
Please Note: Savings inputs shifted forward 23 months
-9
-6
-3
0
3
6
9
-15
-10
-5
0
5
10
15
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Retail Sales
Savings Rate
Savings RateRetail Sales
First in Forecasts Since 1948
US Housing Price Index
Source: Federal Housing Finance Agency1991 = 100
38
$228.3 $256.5
100
150
200
250
300
100
150
200
250
300
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Raw Data
First in Forecasts Since 1948
US Private Sector Employment
Source: BLSAnnual Data Trend
39
85
95
105
115
125
85
95
105
115
125
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Employment Mils of Jobs
Private Sector Employment GrowthJob OpeningsQuit Rate – Rising
3.2% B1.7% C
First in Forecasts Since 1948
US Overall Wage Growth
Source: FRB AtlantaPercent
0
1
2
3
4
5
'06 '08 '10 '12 '14 '16 '18 '20
Raw Data
40
41
First in Forecasts Since 1948
United States Overview Weekly Oil Price & Rig Count
Sources: EIA, Baker HughesRigs: Weekly Count WTI: Average Weekly Price
747 $63.27
$0
$20
$40
$60
$80
$100
$120
0
250
500
750
1000
1250
1500
1750
Jan 2014 Aug 2014 Mar 2015 Oct 2015 May 2016 Dec 2016 Jul 2017 Feb 2018 Sep 2018
USD/bblRig Count
Oil Rigs
WTI Price - Shifted 13 Weeks
42
First in Forecasts Since 1948
DEPRESSION DRIVERS
43
First in Forecasts Since 1948
US Tax Rates and Real GDP Growth
Sources: Tax Foundation, BEA,
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
-5.0%
-3.0%
-1.0%
1.0%
3.0%
5.0%
7.0%
9.0%
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Real GDP Growth Rate - 3/12 Top Marginal Tax Rate
44
Rea
l GD
P G
row
th R
ate Top M
arginal Tax Rate
First in Forecasts Since 1948
US Corporate Tax Rate and Gross Business Investment
Percent45
45
Sources: Tax Policy Center, FRED
0%
10%
20%
30%
40%
50%
60%
70%
0%
10%
20%
30%
40%
50%
60%
70%
'60 '64 '68 '72 '76 '80 '84 '88 '92 '96 '00 '04 '08 '12 '16
Corporate Tax Rate %
Gross Business Investment (% of GDP)
Linear (Gross Business Investment (% of GDP))
First in Forecasts Since 1948
Percent of Total US Tax Receipts by Source
Percent46
46
Sources: Tax Policy Center
8.8%
48.8%
0%
10%
20%
30%
40%
50%
60%
0%
10%
20%
30%
40%
50%
60%
1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 2024
Individual Income TaxesCorporation Income Taxes
First in Forecasts Since 1948
US Federal Government Current Tax Receipts to Consumption Expenditures to Current Transfer Payments to
Federal Government Interest Payments
Source: BEABillions of Dollars
47
$0
$375
$750
$1,125
$1,500
$1,875
$2,250
$2,625
$3,000Tax/Exp/Paym
Current Tax ReceiptsConsumption ExpendituresCurrent Transfer PaymentsInterest Payments
Interest
First in Forecasts Since 194848
First in Forecasts Since 1948
ITR Management Objectives™Preparing for the Future
49
1. Is your revenue trend sensitive to Disposable Personal Income2. Determine if your cycles line up with US Total Industrial Production3. Make sure your training and retention programs are top notch4. Drive efficiencies with technology5. Are you positioned where there is a growing demographic6. Take advantage of still-low interest rates
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50
The Vision Council
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