Industries That Are Bound For Recovery In 2011

Updated: January 11, 2011

The new year is traditionally a time for personal growth and betterment, however this year it is also time for sweeping industry recovery. We've all heard enough bad news about the economy lately, but recent economic forecasts for 2011 are here to put an end to the doomsday sayers of the past quarter-decade. Yes, it appears this year will be a time of prosperity for many major companies both domestic and world wide, most notably those in the following 6 industries.

Technology

After a topsy-turvy 2009 - 2010, investors predict that 2011 should be a year of strong recovery for the tech industry. A recent survey conducted by auditing giant KPMG collected financial projections from top technology executives and found that almost all were optimistic about the new year. According to News Factor, KPMG global chair for the information, communication and entertainment practice Gary Matuszak was pleased with the findings of the research. "Almost 9 out of 10 executives said they expect business conditions in the technology sector to improve in 2011, including stronger revenue," he reports.

The survey also asked the executives what they believed would be the biggest contributors to recovery in the new year. The most popular answer was "cloud computing," representing 54% of responses. Other common answers included mobile applications, client computing/virtualization, and advanced analytics.

Automotive

Bloomberg reports that recent 2010 improvement in the automotive industry was not a freak occurrence, but the sign of a lasting recovery. According to industry projections, sales of automobiles could rise to 12.9 million vehicles in 2011. Although this figure is certainly an improvement as far as recent years go, it still represents the third-worst year since 1992 when 16.8 million vehicles were sold.

"It's going to be methodical, stair-step kind of growth," comments Dan Montague, an analyst at PricewaterhouseCoopers LLP. "There are some serious positives out there, but some buyers have still been forced out of the market due to credit issues, or they're paying down debt and unwilling to originate a new car loan."

Travel

It's no secret that the travel industry has struggled significantly in the past year. The BBC reports that rough economic conditions, as well as other prohibiting factors including "the recent snow, consumers not spending as much, air tax and fuel costs rising, [and] Iceland's ash cloud," have discouraged traveling for both business and pleasure customers. Fortunately, BBC research finds that "the sector is expecting a global recovery this year."

Rental car industry news resource AutoRentalNews.com cites a recent Zagat survey that found a significant increase in the number of annual flights taken by frequent fliers in 2010 compared to 2009, suggesting that the industry should continue to trend upward in 2011. Additional signs of coming prosperity include the Wall Street Journal showing a 2.4% rise in Delta Airlines travel in December of 2010, and the journal's report that all airlines are expecting an increase in business in 2011.

Luxury and Comfort

When the economy takes a dive and people lose their jobs in scores, the average consumer is not thinking about buying expensive luxury items. This was the trend seen over the past few years, however a study conducted by consulting firm Bain & Company predicts that luxury spending will return in 2011. Forbes reported that the study analyzed 220 luxury brands that serve customers with a net worth above $1 million, including leather goods, fashion, jewelry, alcohol and cosmetics, and found that industry sales should increase by 4% in 2011.

Author of the study Claudia D'Arpizio believes that the recession did not cause the drop in luxury spending, but merely accelerated it. "...Consumers were tiring of the "bling" trend--such as showy jewelry and handbags--long before the recession took hold of the economy," says Forbes regarding the study. Luxury spending is expected to continue to rise all through the new year and into 2012, where spending is predicted to rise 7%-8%.

Meetings and Event Planning

With all the recent lay-offs seen in the job market, there have been few new hires to train, and even less money to spend on elaborate seminar events. This is a problem that the National Conference Center reports hit the event planning industry hard, but as the job market improves the industry is poised for a 2011 comeback. According to a 2010 Accenture study, "more than ½ of downsized U.S. businesses plan to rebuild their workforces to pre-recession levels by 2012." The study goes on to note that only 15% of those businesses believe their work force to be industry-leading, suggesting that the demand for advanced training will be on the rise in 2011.

The conclusion drawn by the National Conference Center is that different cities will experience different levels of recovery, but that the overall industry is due for a comeback. Additionally, event planning companies are encouraged to offer virtual meetings to reduce travel costs for businesses who may wish to participate, but find it hard to allocate the appropriate funds.

Chemical Processing

As consumerism picks up, so does the demand for goods production, and in turn, the chemicals that make them. Chemical industry news page ChemicalProcessing.com reports that studies indicate a modest recovery in 2011. "As the worldwide expansion continues, global output should rise by more than 5% in both 2011 and 2012," they predict, citing Asia-Pacific, Africa, the Middle East, emerging Europe, and Latin America as the areas where the most rapid growth should take place.

American chemical production will be on the rise in 2011 as well, fueled particularly by a rise in demand for pharmaceuticals. The aforementioned study cites a predicted 3% rise in domestic industry growth. Additionally, investment in chemical production is expected to rise in the new year, further contributing to the recovery. The study predicts that "[in] 2011 the industry investment cycle should re-engage, with U.S. spending rising more than 6% and accelerating to a 9% gain in 2012."

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