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.

Country Risk

United States Country Risk

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Core Views

  • The US economy is set to grow at a more rapid pace in 2015, supported by lower oil prices, a tightening labour market and improving sentiment. We forecast real GDP growth of 2.9% in 2015, up from 2.4% in 2014. Over the long term, global headwinds and a rebound in imports will cap real GDP growth below historical standards.

  • A stronger real GDP growth outlook and a congress committed to reining in spending will see the US budget deficit continue to narrow in fiscal year 2015, to 2.7% of GDP. Beginning in 2016, the deficit will widen Congress relaxes spending constraints put in place since 2011, rising interest rates increase debt servicing costs and mandatory spending obligations keep upward pressure on expenditures.

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United States Industry Coverage (23)

Agribusiness

United States Agribusiness

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BMI View: Corn and soybean production season will decline year-on-year in the upcoming 2015/16, yet will still be among the largest crops in US agricultural history. Livestock will see some mild improvement in production growth in 2014/15, mainly owing to the poultry and pork sectors. The dairy sector is likely to see some improvement, but a record drought in California (the largest producing state) leads to strong downside production risks. 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....

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Autos

United States Autos

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The US light vehicle market will pass 17mn units in 2015 for the first time since 2001, growing 3.6%. The launch of several new models, including the new Ford F-150, the country's best-selling model, combined with sustained strength in the housing market as homebuilder confidence and permits continue to trend higher, will mean another strong year for light trucks in 2015. We forecast truck sales growth of 6.0%, with passenger car sales to grow at a slightly slower rate of 0.6%.

In May, the market grew 1.6% year-on-year (y-o-y) fuelled by holiday promotions, strong credit growth and lower fuel prices. Demand is still heavily weighted toward sport utility vehicle (SUV) and light truck sales, up 6.8% y-o-y in May, while sales of passenger cars fell 3.7% y-o-y. For 5M15, the light truck market is up 10.0% y-o-y, compared with a 1.3% y-o-y decline for cars.

One bright spot for the passenger car segment is the battery...

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Commercial Banking

United States Commercial Banking

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...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Consumer Electronics

United States Consumer Electronics

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BMI View : The US consumer electronics market is a global leader in terms of market size and adoption of the latest technology - with high penetration rates in most device categories. High penetration will lead to slower growth in some of the key markets such as tablets, smartphones and digital cameras. Despite the maturity of the market BMI believes significant opportunities remain in emerging product categories, as well as the result of a high replacement rate in key categories such as smartphones. Growth areas include large-size HD and UHD TV sets, smartphones, Microsoft Windows 8 convertibles/hybrids, Ultrabooks and smart TV sets. Meanwhile, tablet vendors are already reporting a slight slowdown in sales. However, over the medium...

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Defence & Security

United States Defence & Security

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BMI View: We believe that the United States defence budget will be re-orientated to take account of the threat from the Islamic State of Iraq and Syria (ISIS). This will in our view stimulate procurement plans as the country can now focus on obtaining arms and technologies that might have previously been decided against due to austerity. The main focus of these procurements being the development of the F-35 Lightning II Joint Strike Fighter program, which has been hit by another delay.

ISIS is posing a major security risk to US allies in the Middle East, following its occupation of a considerable quantity of the northern regions of Iraq and Syria...

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Food & Drink

United States Food & Drink

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The US economy is set to grow at a more rapid pace in 2015, supported by lower oil prices, a tightening labour market and improving consumer confidence. Nonetheless, due to the sluggish start of the year, we have downgraded our real GDP forecasts to 2.5% in 2015, against 2.9% previously. Over the long term, global headwinds and a rebound in imports will cap real GDP growth below historical standards.

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 = +3.2%; CAGR to 2019 = +3.4%.

  • 2015 soft drink value sales = +2.6%; CAGR to 2019 = +1.8%.

  • 2015 mass grocery retail sales = +2.8%; CAGR to 2019 = +2.5%.

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Freight Transport

United States Freight Transport

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BMI View: Our general outlook on the US freight sector is that it will enjoy steady growth across all modes in 2015, in line with the strengthening recovery in the economy and a resurgent consumer, and that this will continue through into the following year.

We expect US headline growth will pick up significantly in the coming quarters, bolstered by buoyant household consumption and reduced headwinds in other areas. We forecast real GDP growth of 2.5% in 2015 (down from our previous forecast of 2.9%), which we expect will increase slightly, to 2.6%, in 2016. We expect that growth will average around 2.5% over the next 10 years. Lower fuel costs will ultimately be beneficial to household consumption. We continue to expect that private consumption, the main engine of US growth, will benefit from improving consumer sentiment and a tighter labour market, with unemployment having nearly halved since...

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Information Technology

United States Information Technology

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BMI View: The outlook for US IT spending remains strong when compared to the majority of developed markets over the medium term, as a result of stronger economic performance and a greater interest from enterprises in the latest products and solutions. Cloud computing, real-time enterprise software, security and big data are all areas of spending in which we expect to see strong growth, particularly in the latter years of our forecast. The retail hardware outlook is more mixed, as we...

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Infrastructure

United States Infrastructure

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BMI View: Growth will decelerate in the US construction sector over 2015 and 2016 in line with a normalisation of the housing market following a steep recover over recent years. Whilst infrastructure industry value will sustain its recovery it will not be enough to offset a slowdown.

Key Developments

  • The residential construction sector continues to expand. As expected, data has been and will continue to be mixed and growth is expected to slow over 2015. Housing starts, homebuilder confidence and permits are all trending higher, although starts have struggled to sustain levels above the 1mn mark. While the sector has come a long way since 2011, there is considerable room for further expansion as housing starts remain considerably below the peak of 2,273,000 in January 2006. Consequently, we forecast residential...

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Insurance

United States Insurance

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BMI View: The US insurance sector is highly developed, with insurance providers in both the life and non-life segments expected to grow their written premiums at steady rates throughout our 2015-2019 forecast period. The most recent financial results reported by the major players in both segments, as well as their forward guidance, underscore this positive outlook. These leading firms will reap the benefits of a growing demand for insurance products by leveraging their access to capital, economies of scale, broad product portfolios, distribution channels, innovation capability, and brand recognition. In what follows, we discuss factors which underlie the positive outlook.

While we forecast overall growth for the US' insurance sector, the non-life segment - which accounts for roughly 60% of total premiums written - is expected to considerably outperform the life segment in terms of...

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Medical Devices

United States Medical Devices

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BMI Industry View : The US medical market is forecast to see steady growth over the next five years, despite a projected slowdown in health spending, the impact of the newly introduced Medical Device Excise Tax and uncertainties within the healthcare system in the wake of the Patient Protection and Affordable Care Act. Imports have been growing in line with the market, which remains by far the world's largest. Exports are continuing to rise as US manufacturers seek out opportunities in emerging global markets.

Headline Industry Forecasts

  • At an estimated USD125.4bn in 2013, the US medical device market is the world's largest. Per capita expenditure, at USD392, is the...

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Metals

United States Metals

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BMI View:  The US metals sector will see modest growth over the next several years. Accelerating economic expansion will encourage metal production and consumption, but total production and consumption levels will remain below pre-crisis levels through 2018.

Accelerating real GDP growth in the coming quarters will lead to modest growth in the metals sector. We now forecast real GDP growth of 2.7% in 2015, up from our previous forecast of 2.6%, and estimate growth of 2.3% in 2014, up from...

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Mining

United States Mining

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BMI View: While the US mining industry continues to be one the largest, most diverse and well developed in the world, we expect the sector to grow at only a moderate pace through the 2019. One of the main factors impeding its expansion is global price weakness in a number of key mined products, including gold, coal and copper which is leading to consolidation and a lack of new investment in some markets. The total industry value is nevertheless forecast to reach USD139bn in 2019 while the US's considerable reserves and well-established framework will ensure the country remains an important centre for mining for many years to come.

We forecast the US mining sector will see modest average annual growth, reflecting a broader trend among developed mining markets. For the period of 2015-2019, we forecast average annual growth of 1.9%. Ultimately, the majority of growth in both mineral output...

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Oil & Gas

United States Oil & Gas

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BMI View: The US will continue to lead gains in non-OPEC crude oil production over the next decade. We forecast crude oil and NGLs production will rise from an estimated 13.6mn b/d in 2015 to 15.8mn b/d by 2024. 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...

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Petrochemicals

United States Petrochemicals

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US plastics output grew strongly in the first few months of 2015 amid a buoyant market and competitive production. The market is likely to remain supportive of growth in the months and years ahead as industrial growth remains strong, although the construction sector will slow and impact on a range of plastics used in construction materials, particularly PVC.

In the first four months of 2015, US production of major plastic resins grew 3.0% while sales and captive plastic use grew 5.4% year-on-year (y-o-y). In May the three month moving average Chemical Activity Barometer (CAB), the American Chemistry Council's (ACC) economic indicator, grew 0.7% month-on-month and was up 3.3% y-o-y. This indicated strengthening business activity that should carry through into 2016.

Production growth in the automotive industry is set to moderate due to capacity constraints. However, growth is set to continue steadily over the...

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Pharmaceuticals & Healthcare

United States Pharmaceuticals & Healthcare

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BMI View: The US healthcare market will continue to offer considerable commercial opportunities that are higher than what the already large economy would indicate. This is due to the decentralised and privatised nature of the operating environment. There are also numerous intermediaries between patients and providers of medical services, with each entity claiming a component of overall expenditure. Healthcare reform is taking place, and efficiencies are being realised, expanding the prospects for new market entrants.

Headline Expenditure Projections

  • Pharmaceuticals: USD371.2bn in 2014 to USD383.1bn in 2015; +3.2% growth. Market size revised upwards since Q215 due to receipt of new historical data.

  • ...

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Power

United States Power

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BMI View: Low natural gas prices, EPA's emissions regulations and strong growth in solar and wind power will all lead to the displacement of coal as the main source of power generation in the US electricity mix. As growth in gas power and renewables continues apace, hydropower and nuclear will see only limited growth. Investment in gas pipeline infrastructure will be needed to overcome gas supply bottlenecks and the grid will need to be upgraded to ensure it can handle the...

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Real Estate

United States Real Estate

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As the US economy continues its strong recovery, the commercial real estate market is profiting from an improving business environment, inflation rates and consumer confidence. Following robust growth in 2014, we expect 2015 to continue in similar lines, with new properties entering the market stabilising costs and vacancy rates in all sub-sectors and cities.

With a focus on the cities of New York, Los Angeles, Chicago, Dallas and Philadelphia, this report covers the rental market performance in terms of rates and yields and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the economy on a market that can dictate regional performance. In this respect, we generally expect the stable growth seen in 2014 to continue in 2015 with moderate-to-strong growth in all sectors. Reasons for this positive outlook are solid growth indicators of the wider US economy,...

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Renewables

United States Renewables

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BMI View: Ongoing governmental support by the Obama administration continues to foster prospects for renewable energy in the US as private investment levels rise. While wind energy remains the strongest sector in overall capacity terms and will also experience the majority of added capacity in 2015, protracted uncertainty surrounding the PTC scheme undermines wind power reaching its true potential. Conversely, we hold a bright outlook for the solar sector, due to innovative financing vehicles in both the utility-scale and the rooftop segment, and particularly for residential installations due to prospects of 'smart' solar.

Over the past years, the US has increasingly shifted towards becoming a global renewables powerhouse. In 2014, the country had the highest level of renewable energy in its overall energy consumption since the 1930s, when wood was still a crucial part of its...

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Retail

United States Retail

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BMI View: The US economy is set to see a more rapid pace of growth in 2015 than in 2014, supported by lower oil prices, a tightening labour market and improving sentiment. We forecast real GDP growth of 2.9% in 2015, up from an estimated 2.4% in 2014. Lower fuel prices and rising consumer confidence have both informed our view that private consumption will be a major driving force behind retail sector growth over the coming quarters.

The consumer sector will be a bright spot for the US economy over the coming quarters, due to falling unemployment, lower fuel prices (and by extension greater levels of disposable income), and rising incomes. Private consumption was revised up a full percentage point, to 3.2%, while measures of consumer confidence have reached their highest levels since early 2008, suggesting that this momentum will be maintained. Meanwhile, the end-2014 unemployment rate was just 5.6%, below our...

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Shipping

United States Shipping

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BMI View: BMI maintains its cautiously optimistic view on the US shipping sector. We believe 2015 will see the country's major facilities consolidate the growth seen in 2014. Our overall view that the US economy will continue to accelerate remains firmly in place, and we forecast GDP growth of 2.7% in 2015, with growing consumer demand in particular providing a boost to container volumes.

Real GDP growth in the US will accelerate in the coming years, on the back of stronger private consumption and low borrowing costs. We forecast headline growth of 2.9% in 2015 and 2.6% in 2016, up from 2.4% in 2014. The main driver of this growth will be the private sector, with household consumption bolstered by lower inflation, an improved labour market and low borrowing costs.

The outlook for the consumer sector continues to improve as unemployment...

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Telecommunications

United States Telecommunications

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We expect the consolidation trend on the USA telecoms market to continue following a number of acquisitions in 2014. T-Mobile US is reportedly in discussions to merge with local satellite TV provider DISH Network and Canadian Sierra Wireless is due to acquire a US-based 4G LTE service provider Accel Networks . However, BMI cautions that one of the recent acquisitions - Comcast-Time Warner deal has yet to find regulatory approval. Adding to the already intense competition, mobile value added services provider Mariposa is preparing to...

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Tourism

United States Tourism

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BMI View: With the US economy forecast to grow by 2.9% in 2015, we are anticipating an uptick in tourism arrivals, which will grow by 2.4%. We expect this to contribute to steady growth in the accommodation sector, with investment in the sector growing by a higher rate than arrivals.

We have a positive view of the US tourist industry in 2015, which we expect to benefit from rising tourist arrivals and sustained investment in the hotel industry. However, one trend to watch is European tourism, which is suffering from sluggish economic growth in the Eurozone and a depreciating euro against the dollar. As a result, while we are currently forecasting 0.5% arrivals growth from Europe in 2015 before a 1.09% decline in 2016, risks are to the downside. A sustained decline in arrivals from Europe would weigh on the US tourism industry into 2016, especially as we note that European tourists tend to be...

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