Inflationary pressures are high everywhere, but especially in emerging economies, and among the developed area, the Eurozone. Until the emerging markets slow, commodity prices probably won't weaken, Tabernacki said.

Some specific comments Tabernacki had on what's happening globally were:

• Canada. Canada's economy will see only 0.1% growth this year. The business investment boom now occurring will moderate. Industrial production will bottom out at the end of the year, and then begin climbing into 2009.
• Europe. The EU seems to be going through the same problems it had in 2002/ 2003, including too much export-led growth with one additional factor: financial pressures such as inflation, wage issues, tightened credit and oversupply of inventories.
• Middle East/North Africa. The countries' current economic boom will not falter this year, but rather intensify. However, the bust is coming-just not in 2008.
• China. One risk it faces going forward is that, aside from exports, the only driver of real growth is investments, so overbuilding remains a risk. China also needs to contain its double-digit inflation; and the economy will need to grow at least 6% to 7% a year just to accommodate people coming into the labor market.
• India. The country is not yet fully exposed to the global economy, but is looking inward, driven predominately by consumer spending. However, while the economy is less dependent on financial markets, there are indications of overheating, inflation and slowing growth.
• Latin America. While people tend to clump all the countries in this area together, there are many little areas with different types of growth. Clearly Mexico's connection to the U.S. makes it most vulnerable to suffering from what happens in this nation while some of the countries in South America (Brazil in particular) are bright pockets of growth.

TABERNACKI'S FORECAST: Assuming the housing market in the U.S. doesn't recover until some time next year, the bottom of the national market will come in the first quarter of 2009. Exports will see growth of 8.2% in 2009, but they will begin to drop after that. Meanwhile, imports will begin to grow and reach a 6.4 % gain by 2010. Tabernacki predicted the dependence that countries like Germany, Japan and China have on exports to maintain their countries' growth rates will leave them vulnerable going forward.

WATER/WASTEWATER
A Slower Pace, But Plenty of Potential

It's not easy to entertain an audience while spouting economic statistics, but Tom Decker, a veteran speaker at VMA's Market Outlook Workshop, found a way. Decker, who is a vice president with CH2M Hill, presented the audience with his version of Jeopardy-water and wastewater style.

For $100, what is the question behind the answer, "5%," Decker began. How much did wastewater grow in 2007?

That's a slower pace from previous years where wastewater growth year over year was averaging in the double digits, Decker said. But wastewater is still outgrowing the pace of water. In fact, some reports showed water declines for the last year, he said.

One reason for slower growth is "utilities are seeing sharp increases for O&M [operation and maintenance], higher energy costs, high chemical costs," he said. In such a situation, "the amount left to spend on capital projects drops."

"This is not a trend, but you should keep an eye on it," Decker said. History has shown that the industry lags what's happening with the economy by about 18 months.

So for $200, what's the question to the answer "two times," Decker quizzed the audience. What is the rate at which the world desalination capacity will increase by 2016?

Since only 1% of the world's usable water supply is now supplied by that process, that leaves plenty of room for growth, Decker said.

"Process advances keep on coming; the cost to produce inches downward, and brine disposal [one of the industry's main physical challenges] is becoming more advanced," Decker said.

And for $300, what's the question answered by: "51%," Decker next ?challenged. What is the storage capacity for water in Lake Mead?

He cited that number because it is an indication of a situation happening not only in the U.S., but in the world. Studies have shown that 39 states will experience water shortages by 2020 and that two-thirds of the world will be in water stress by 2025, he said.

"Call it what you want, but there is a water drought," Decker declared.

One way states are reacting is to put restrictions on development. In California and Colorado, for example, jurisdictions are requiring documentation that a development will have 20 years of water supply before construction can begin, Decker said.

The next Jeopardy answer was: "The Gay '90s, the Roaring '20s, Post-WWII, and That '70s Show." The question revealed a problem in the United States (as well as some of the developed nations): When was much of the nation's water infrastructure built?

"None of that is terribly recent, is it?" Decker asked the audience. In this nation, there are 72,000 water miles that are greater than 80 years old-several decades beyond their normal life expectancy, he said. New York City itself loses 36 million gallons a day from its water system on the way from the reservoir to the city; and a third of the national publicly owned treatment works are currently subject to Environmental Protection Agency enforcement actions because of equipment malfunctions, Decker pointed out.