ITR’s Third Quarter Report: Onward and Mostly Upward

Similar to its last two quarterly reports, ITR Economics in its latest forecast continues to remain bullish on many of our end-user markets. Indeed, they are forecasting robust growth across an array of sectors for the next two to three quarters.

Below is a quick recap of VMA primary end-user industries near term outlook:

• U.S. chemicals — forecasting continued growth in 2021 and 2022 when this rise will peak mid-year.
• Nonresidential construction — ITR expects this market to decline by approximately 2.6% this year; the good news is that it will likely increase over 6% next year due in part to pent up demand, and this rise will continue into 2023.
• Oil and gas — forecasting a 2.5% decline this year due to producers’ choice to fix their balance sheets instead of increasing production output; as we come out of the pandemic, more oil and gas will be needed for gas for traveling and as inputs for manufactured products. Therefore, they are forecasting a healthy 13.4% rise in this market next year.
• Paper and paper products — rose slightly by 0.2% year to date due in part to people working from home; as workers return to the office and demand for office products increase, they see this market growing by 0.7% in 2022.
• Water/wastewater — this industry was revised down a good deal due to a data adjustment from the Census Bureau as well as surging construction prices. ITR’s updated forecast predicts that this market will be down 1.2% in 2021. However, ITR is forecasting a 6.2% growth rate in 2022 as new home construction will increase demand for water and sewer facilities.

The bottom line of the report is that business is good — particularly compared to this time last year. Additionally, trends in U.S. ISM PMI suggest that business cycle rise in the industrial economy could persist into the second quarter of 2022. Good news indeed for manufacturers. So stay the course, retain your key staff and start to think about what’s next when we begin to hit slowing growth in the latter half of 2022.