More economic indicators
Add comment June 6th, 2008
I’m always looking for more numbers to see if I can spot trends. Here’s a couple.
Between April 17 and May 29, 39 of the 60 companies on Star 60 stock index released quarterly earnings. I may have missed a few — there were days five and six were being released at a time. Of those, 21 reported year-over-year earnings increases, which overall is a good sign.
Among the gainers were some of the area’s largest employers, United Technologies, which owns Hamilton Sundstrand in Rockford and Taylor Co. in Rockton, Woodward Governor and Wal-Mart Stores Inc.
Of the ones that reported decreased earnings, some were directly tied to the nation’s struggling real estate and construction industry, including Lowe’s Companies Inc., The Home Depot and The Valspar Corp.
Of course, just looking at whether net income went up or down compared to the year before is not a perfect indicator. For example, Reliance Steel & Aluminum, parent company of Liebovich Brothers Inc., made $107.4 million in its first quarter. That’s good money but down 4 percent from 2007.
Of the 39 companies that I kept track of this earnings cycle, there were five that outright lost money — Sears Holdings Corp., General Motors Corp., UAL Corp., our own AMCORE Financial and GateHouse Media Inc., which owns the Rockford Register Star.
So I’m definately on the wrong side of this economic trend.
Another thing I looked at this week is business bankruptcies. Through May, 13 companies in Boone, Ogle and Winnebago counties have filed for bankruptcy protection compared to just five in the first five months of 2007.
At least six of the bankuptcies this year have ties to the struggling real estate and construction market, including two of the three bankruptcies in May — Arco Pool & Spa Inc. of Rockford and W. Molitor Construction Inc. of South Beloit.
Glen Turpoff, executive director of the Northern Illinois Building Contractors Association, said that wasn’t a surprise.
“There isn’t a business in any industry that isn’t closely examining how it’s going to get through this economic cycle,” Turpoff said. “It may have started in real estate and construction, but it’s spread to every industry.”
