The US is an undisputed superpower and occupies centre stage in most international diplomacy. It is the world's largest economy, with an impressive record of entrepreneurial dynamism and innovation, as well as high research and development spending. Despite some threats to its reserve status, the US dollar is treated as an international currency, meaning investors around the world are prepared to hold US debt. For this reason, the US is uniquely able to run large fiscal and current account deficits.
We keep our clients informed of the latest market moves and political developments in the US, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 22 of the US’ most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our results-proven research teams. Our aim is to keep you ahead of the game, so you can operate with confidence in the US.
United States Country Risk
The US economy is set to grow at a rate below its historical trend in 2016, as a strengthening labour market, which will support private consumption, is offset by export and manufacturing headwinds. We forecast real GDP growth of 2.2% in 2016, compared to an estimated 2.5% in 2015.
The fiscal deficit will widen beginning in 2016, as Congress relaxes spending constraints put in place since 2011, rising interest rates...
United States Industry Coverage (22)
United States Agribusiness
BMI View: Corn and soybean production season will decline year-on-year in the upcoming 2016/17, yet will still be among the largest crops in US agricultural history. Livestock will see some mild improvement in production growth in 2015/16, mainly owing to the poultry and beef sectors. Over the long term, the poultry sub-sector will remain the outperformer in the livestock complex and we see the strongest production growth potential for soybeans among the grains complex. We believe grains production will stagnate overall due to a lower planted area on the back of lower prices.
United States Autos
BMI View: Light vehicle sales growth will slow to 2.0% in 2016, with the light truck segment continuing its outperformance.
|Passenger Car and Light Commercial Vehicle Sales|
|f = BMI forecast. Source: US Dept of Transport, BMI|
Continuation of low oil prices in 2016 will see the light truck segment continue its outperformance
United States Commercial Banking
|Date||Total assets||Client loans||Bond portfolio||Other||Liabilities and capital||Capital||Client deposits...|
United States Consumer Electronics
BMI View : We continue to maintain a positive outlook for the US consumer electronics market in our Q116 report update. We believe that the US consumer electronics market will remain the global leader in terms of market size and adoption of latest technologies over the course of 2016 to 2019. 2016 will see the overall market size expand by 2%, with the market reaching an estimated total value of USD320.1bn. High device penetration rates, strong demand for the latest devices and short replacement cycles makes the US the most market lucrative for vendors - but high penetration also results in diminished ...
Defence & Security
United States Defence & Security
BMI View: The United Stated defence military complex is the biggest in the world. United States military expenditure is the highest in the world, driven the by government commitment to various peace keeping missions and large number of armed force deployments, in addition to a sizeable domestic terrorism threat. We believe that the United States defence budget will increase and be re- oriented to take account of the threat posed by Islamic State of Iraq and Syria (ISIS) and to address a diverse range of international commitments.
United States faces a complex security scenario: ISIL is posing a major security risk in the Middle East to the United States and its allies. United States also sees necessary to maintain military presence in Afghanistan until at least December 2015. These...
Food & Drink
United States Food & Drink
BMI View: We hold a favourable outlook for the US consumer over the next five years, with private consumption growth outperforming most developed markets. This will create premiumisation opportunities in the food and drink sector. Nonetheless, shifts in consumer preferences will continue to pose significant challenges for legacy food and drink manufacturers, as consumers turn away from categories such as commercial beer, carbonated soft drinks and prepared meals.
Headline Industry Forecasts (local currency):
2015 per capita food consumption = +2.1%; five-year compound annual growth rate (CAGR) to 2019 = +4.1%.
2015 alcoholic drinks value sales = +2.0%; CAGR to 2019 = +3.3%.
2015 soft drink value sales = +1.4%; CAGR to 2019 = +1.7%.
United States Freight Transport
BMI View: We maintain our positive outlook for healthy growth rates across the US freight sector over the short and medium term, with road set to be the outperformer in 2015. Key factors underlining our freight forecasts include the lower oil prices that will reduce fuel costs across the mix, while positive economic growth outlook will heighten consumer demand.
Continued gains in the labour market and high consumer confidence will see private consumption in the US pick up in the coming quarters, boosting headline growth. We forecast real GDP growth of 2.5% in 2015, increasing slightly to 2.6% in 2016. Moreover, growth will average around 2.5% over the next 10 years, a significant improvement from the 1.6% average seen over the past decade. Lower fuel costs will also be beneficial to household consumption. These factors will result in steady growth for all freight modes over the coming year....
United States Information Technology
BMI View: We have left our forecasts for the US IT market unchanged for the Q116 report update and are forecasting another strong year for the IT market in the US. We forecast the overall market to reach a total value of USD707.3bn in 2016 and believe that the US IT market will be a strong performer versus other developed markets over the medium term, as a result of stronger macroeconomic performance and a greater interest from enterprises in the latest products and solutions. We have a particularly bullish outlook for the domestic cloud computing, real-time enterprise software, security and big data markets. We expect to see strong growth in these emerging technologies, particularly in the latter years of our forecast, and for the US to be at the forefront of global adoption and innovation. Meanwhile, the retail hardware outlook is more mixed, as we expect continued demand growth for tablets in the...
United States Infrastructure
BMI View: The US construction sector will begin to slow in 2016 as the housing market starts to normalise following a steep recovery over recent years. While infrastructure industry value will sustain its recovery it will not be enough to offset a slowdown.
The US construction industry will begin to slow in 2016, but still post a strong growth rate, as the residential construction market continues to boom. We forecast a headline growth rate of 2.3% for 2016, down from an estimate 4.5% in 2015. We expect this slowdown to continue, with the industry to average only 1.2% over our 10-year forecast period...
United States Insurance
BMI View: The large and well-established insurance market in the US is set to benefit from a positive domestic economy environment, as the US economy is bolstered by lower oil prices, a tightening labour market and improving investor sentiment, although rising external headwinds will see that growth remains relatively subdued. Both the life and non-life insurance sectors are very well-developed in the US where a large number of firms are active in the market with one of the broadest product offerings available globally. Premiums written in both sectors are forecast to increase steadily throughout the forecast period, though faster expansion in the life sector will see it gain some market share from the larger non-life insurance sector by the end of the current forecast period in 2019.
United States Medical Devices
BMI View : The US market, the world's largest, will see steady growth over the next five years, outstripping most other developed markets. Demand will be driven by strong economic growth, favourable demographics, the rising prevalence of chronic diseases, the previously uninsured population gaining access to healthcare services and the market's appetite for technologies that improve cost-effectiveness.
United States Metals
BMI View: Despite a relatively favourable economic outlook, we expect mixed fortunes for US metals producers with steel makers in particular, likely to find themselves challenges by falling prices, rising import volumes and currency movements. Elsewhere, steady if modest growth in construction and autos manufacturing should sustain demand for aluminium, copper and other metals over our forecast period through the 2019.
The US in one of the world's leading metals producers, with significant capacity in the production of steel and other industrial metals. A sustained economic expansion has helped to support a moderate recovery in consumption and production as the construction and manufacturing sectors have emerged from the crisis. 2014 saw crude steel consumption grow by 11.7% year-on-year, supporting a 1.5% increase in output. We also note moderate growth in consumption of zinc, copper...
United States Mining
BMI View: The United States' mining sector will experience production declines in the coal, copper and lead industries due to structurally lower commodity prices and elevated operating costs in 2016. The country's gold industry will experience slight production growth; however, low gold prices will curb growth.
Oil & Gas
United States Oil & Gas
BMI View: The US will continue to lead gains in non-OPEC crude oil production over the next decade despite the fall in oil prices. High growth rates seen in recent years will moderate through our 10-year forecast period, reflecting abrupt depletion rates in shale oil fields, a glut in the domestic market for light sweet crude, and lower oil prices dampening some production. Consumption of fuels will be largely stagnant throughout the course of the next decade as energy efficiency gains take...
United States Petrochemicals
The US petrochemicals industry is expected to shrug off the challenge of loss of competitiveness in its dominant ethane feedstock relative to naphtha used by producers in Europe and Asia. US production retains a favourable edge in the cost curve, supply chains are well integrated and feed is sufficient to fulfil the demand of new capacity going forward.
The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council, grew 1.7% y-o-y on average in H215 as measured on a three-month moving average (3MMA). The CAB stabilised in November, rising 0.1% m-o-m following three consecutive months of decline. The pattern reverses a downward trend that had begun to gain momentum. The CAB was up 1.3% y-o-y in November 2015, representing a deceleration of annual growth.
The focus in coming months will be the planned USD120bn merger of two US chemical giants, Dow Chemical...
Pharmaceuticals & Healthcare
United States Pharmaceuticals & Healthcare
BMI View: The US pharmaceutical market will continue to display robust growth over the medium term despite efforts from the public and private sectors to reduce drug spending. Many newly launched patented drugs that have clear efficacy and safety benefits are able to command premium prices from payers. This external validation provides buoyancy to the industry, which has been recently accused of price gouging.
Headline Expenditure Projections
Pharmaceuticals: USD309.9bn in 2014 to USD326.9bn in 2015; +5.5% growth. Historic market size revised downwards significantly since Q315 due to adoption of new data source...
United States Power
BMI View: We maintain natural gas-fired power and renewable energy will be the fastest growing sectors within the US electricity market, attracting increasing investment - together with power transmission and distribution infrastructure. This will be the result of supportive regulations for renewables and the continued availability of cheap natural gas, which will depress wholesale power prices and squeeze the profits of merchant nuclear power plants.
Latest Updates And Structural Trends
With BMI's Oil & Gas team forecasting Henry Hub natural gas prices to remain below H1 2014 levels through to 2024, we believe the continued availability of cheap natural gas will be the main driver of developments in the US power market over the coming decade. In particular, low fuel prices will be the primary cause of...
United States Real Estate
BMI View: A budding business environment, low inflationary policy and loose borrowing conditions contribute to a positive outlook on US commercial real estate. Recent financial troubles in China, resulting in a stock market sell-off, influenced uneasy consumer confidence and stagnant job creation over the last quarters of 2015, which look to cause slight headwinds to the sector. Although overall, good financial availability and growing demand should buoyant rental rates in the long term.
The US economy currently sits in good health and by many measures looks in the best shape since the great recession, this is primarily supported by lower oil prices stable labour market and growing business sentiment. Although, recent devaluation in the Chinese stock market, resulting in a significant slowdown in growth for the Asian economy, and appreciation in the...
United States Renewables
|e/f = BMI estimate/forecast. Source: EIA, National Sources,...|
United States Retail
BMI View: The US retail sector is continuing its revival, as the economic recovery is centred around consumption. Lower oil prices, low inflation, tightening labour market and low interest rates are all fuelling household spending. Growth is coming from online sales in particular, as e-commerce continues its explosive trajectory. While interest rates are set to rise, this will be a gradual process. We therefore expect these trends to continue to play out, with opportunities across the wide retail sector spectrum.
|Headline Household Spending|
United States Telecommunications
|Connected Devices Core Growth Driver|
|Connected Devices (LHS, mn) And Share Of Total Subscriptions (RHS, %), 2013-2014|
BMI estimates there were 345mn mobile subscriptions in the market at the end of June 2015, with the main growth coming from connected devices. The FCC reports they represented just over 10% of connections at the end of 2014, equating to a figure of just below 40mn.
For the first time, in Q215, Comcast's internet...
United States Tourism
BMI View: Tourist arrivals will grow by 2.6% in 2016, with growth set to continue to 2019 as a result of growing arrivals from markets such as Latin America, and a robust domestic tourism market. This will have positive implications for the accommodation sector, with major hotel groups continuing to expand their presence in the country.