By Nortbert Hildebrand
DisplayDaily

As the summer of 2013 is officially over and the last quarter of this year begins, we are all anxious to see how the holiday season will play out and which way the economy is heading. For several years we have seen very poor economic conditions and one of the longest recessions in the last few decades. One the positive side we see a slow, but steady increase in the economic indicators.

There is a good discussion of the U.S. economic trends by Doug Short. I will show some of his graphs to illustrate the current economic status.

Source: www.advisorperspectives.com

The graph illustrates clearly that while we are not in a recession any more, we are still far below the average consumer sentiment level for non-recession years. In the lower part you see the GDP growth still being above zero, however, the growth is much slower than in earlier years.

Another indicator I wanted to show is the Small Business Optimism Index from the NFIB (National Foundation of Independent Business). According to the data, the small businesses around the country have never recovered from the financial crisis.  Starting in 2007 their Optimism Index went downhill and never recovered to the pre-recession level.

Source: www.advisorperspectives.com

Overall this does not paint a very good picture. While overall the economy might be doing better, it never got into the growth scenario we saw during the last two decades. With small businesses and consumers not being overly optimistic about the future,we have to ask the question how good the holiday season will be.

When we think about the CE industry and the display industry especially, we have to keep in mind that the US is an important country, but not the only one that can drive the world economy. China and Europe have become economic equals to the U.S. and what happens there matters as much as here at home.

As Europe is not one country, economic trends are difficult to obtain and interpret. As some countries are doing well, others are suffering at the same time. Taking a look at China shows that not everything is positive there either.  When we compare the consumer confidence of the US with China we see that both tend to follow each other.

Source: www.tradingeconomics.com

The Black line representing the U.S. and the red dashed line representing China. Overall they do correlate pretty well over the last five years. While in the earlier parts of the graph, the U.S. seems to lead the consumer confidence development, this may have reversed in recent years as the consumer confidence in China seems to be more in sync with the U.S. It could also be that the consumer confidence in these strong economies are heading in different directions.

At the same time, the CEA published its data on the consumer sentiment towards technology spending. This index looks how likely consumers will spend money on consumer electronics. This ICTE (Index of Consumer Technology Expectations) dipped in September by 6.5 points to a value of 80.7 points. A recent study by the CEA showed that of the 51 percent of consumers planning on buying electronics this year, the majority (62 percent) will wait for Black Friday.  Not a good indicator for any improvements in the consumer electronics business.

This does not make for a rosy outlook for the coming months. On the other hand, Apple reported record sales of its just released iPhones. With the imminent release of the new iPad generation coming up pretty soon, Apple might be able to shift the CE sales up a notch into more positive territory.

Either way, the crystal balls are little cloudy right now and as it seems the economy could head up or down.