A complicated puzzle

There really is no need for me to comment, in this column, on the great year experienced by the industrial laser industry because it is detailed in the lead feature of this issue. I’ll just emphasize that this was a record year for revenues and profits for most industry suppliers.

I do want to congratulate these suppliers for the way in which they responded to the spurt of orders that flowed in during the early months of the year, a situation that we all joke about because the question often asked is: “How are we going to fill these orders?”

Laser and system manufacturers struggled as their vendors ramped-up recession-caused low inventories of the key material and components their customers needed to make timely shipments. It was a trying, but good, time, and eventually as the year moved on, it sorted itself out, even though the laser industry was experiencing a record selling year.

For me, sitting in the Editor-in-Chief’s seat as I prepared the Annual Economic Review for this issue, it was also a trying time. There was, on the one hand, euphoria as the industry reported quarter after quarter of increasing revenues and, on the other hand, concern that the global manufacturing industry, the customer for these lasers, was in turmoil. Every time I spoke with laser product suppliers, the message they left me with was caution as they, too, were worried about the drumbeat of support for a double-dip recession.

It wasn’t until the end of the third quarter that suppliers began to breathe easier as it became obvious that the industrial laser market had weathered the storm, and at least 2011 was going to finish on an up note. As for me, as I began to prepare the backup for my 2012 market forecast, I became aware that the strong industrial buyers of 2011 were beginning to experience market pressures of their own and that the prospects for 2012 were not as bright as the experience of 2011. Surveys of the laser industry confirmed this as the overall view seemed to be that 2012 would be a repeat of 2011: a good year, but with a slower growth pattern throughout.

A repeat isn‘t all that bad when the year being duplicated was a record year. Especially when the product suppliers were in better shape financially and organizationally than they were in 2009 when the recession hit with full force. Lean manufacturers will not be taken by surprise as markets fluctuate in the new year, and the lessons learned will allow the laser industry to enjoy a good year.

As for me, I was still changing my market numbers right up to the publishing deadline so that the report in this issue would be as timely as possible. I have taken a very conservative view of the 2012 markets, preferring to make upward adjustments if nagging international and domestic issues are resolved.

That old salesman’s adage that the economy does well in an election year will be tested this year in the US, as a fractured, essentially non-responsive government has yet to show that it can rally to insure economic health in the manufacturing sector. And the yo-yo financial news from Europe was, as this was written, still oscillating from day to day, defying resolution. The situation in Asia was not much better, with China wrestling with its own set of problems, which as the largest market for industrial laser products, was a concern for suppliers.

However, these events are not new, and we lived with them through the second half of 2011, so I think we should be able to handle this year’s similar oscillating events as well.

David A. Belforte

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