News & Analysis
SEMI summit spotlights threats to electronics growth
Brian Fuller
1/15/2013 1:01 AM EST
HALF MOON BAY, Calif.--The global economy and by extension the
electronics industry now tied at its hip will continue to plod
forward in the coming months, experiencing very modest growth, but
governmental fiscal issues worldwide and a higher U.S. payroll tax
could drag that down in 2013.
That was the mixed assessment Monday (Jan. 14) from economists and industry observers at semiconductor equipment vendor trade group SEMI's annual Industry Strategy Symposium here.
"We're seeing this lift begin to take hold," said Bruce Kasman, chief economist and managing director of global research for J.P. Morgan. Kasman said the bar "was not high" for improvement, but he noted that fear- and uncertainty-fueled corporate pullbacks in the middle of 2012 have given way to a more positive outlook.
Two factors could exert drag on that lift, however, Kasman said: fiscal and credit issues in the U.S. and Europe and consumer pullback in North America thanks to higher payrolls taxes. Those fiscal issues will create a one-half percentage-point drag on growth in 2013, compared with 2012, he said.
Secondly, in the United States, the $125 billion payroll tax hike hits people's paychecks in the first part of the year. Where businesses took their "step back" in the middle of 2012 and have since rebounded, consumers ended 2012 optimistically.
"We're a little worried that the U.S. consumers are not only sitting with a tax increase but a tax increase that it really didn't position itself for in terms of expectations," Kasman said. "We do think there's a hit here coming and a fairly significant one as far as consumption's concerned at the start of the year," he added.
Next: Better clarity
That was the mixed assessment Monday (Jan. 14) from economists and industry observers at semiconductor equipment vendor trade group SEMI's annual Industry Strategy Symposium here.
"We're seeing this lift begin to take hold," said Bruce Kasman, chief economist and managing director of global research for J.P. Morgan. Kasman said the bar "was not high" for improvement, but he noted that fear- and uncertainty-fueled corporate pullbacks in the middle of 2012 have given way to a more positive outlook.
Two factors could exert drag on that lift, however, Kasman said: fiscal and credit issues in the U.S. and Europe and consumer pullback in North America thanks to higher payrolls taxes. Those fiscal issues will create a one-half percentage-point drag on growth in 2013, compared with 2012, he said.
Secondly, in the United States, the $125 billion payroll tax hike hits people's paychecks in the first part of the year. Where businesses took their "step back" in the middle of 2012 and have since rebounded, consumers ended 2012 optimistically.
"We're a little worried that the U.S. consumers are not only sitting with a tax increase but a tax increase that it really didn't position itself for in terms of expectations," Kasman said. "We do think there's a hit here coming and a fairly significant one as far as consumption's concerned at the start of the year," he added.
Next: Better clarity
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