The course looks gnarly

Starting a new year can be a little like skiing a trail for the first time. If you're lucky and the lift is adjacent to the trail you have chosen, you can get a look at it and file away information on where to turn or where to change the direction of your descent. But for the most part, it is a real-time activity with no forewarning. Depending on your level of expertise, adjusting to changing slope conditions or unexpected obstacles is a relatively straightforward procedure aided by years of experience in similar situations. Also, you might have received some hints from other skiers on slope conditions and their experiences on that trail.

We'd like to think that this year the laser industry will be a smooth run, with any bumps and unexpected obstacles well within our expertise. That's usually far from reality. However, we do know a little bit about the first quarter because the die has already been cast with backlogs from the last quarter of the past year. For example, the laser industry started 2012 with a healthy backlog that carried many suppliers well into the second quarter. A major bump, the freezing of the Chinese imported capital-equipment market, was unexpected, and some suppliers were unprepared. Add to this the also unexpected obstacle caused by a political spat between China and Japan that impacted the sales of Japanese capital equipment into this large market, and cost some suppliers a 20% loss in business. That's a mogul you didn't see coming.

The ongoing economic distress in Europe has been such a dragged-out affair that it is now just a series of small ripples we are equipped to handle. The same holds true for the "fiscal cliff" mess in Washington, which, by the time this is published, should be over. At best, its effects will be just a bigger ripple that only affects the U.S.

During the period it took to prepare my report in this issue, I sought the wisdom of many who make their living in the industrial laser sector. If I was schussing into uncharted territory, I valued the opinions of others making the same trip. Like a downhill skier, each had his own anecdotal contribution, but most took refuge under that worn-out descriptor 'uncertainty'. Prodding them to stretch their thinking over the next terrain drop, I managed a consensus on a flat-to-low growth 2013, ending with an uptick as the groundwork for a more prosperous 2014 was laid in the last quarter.

I've been doing these forecasts for about 28 years, starting in the predecessor to this magazine, Industrial Laser Review. A broader audience was exposed to my analysis through the Marketplace for Lasers seminar organized 25 years ago by sister publication Laser Focus World, whose Editor-in-Chief, Conard Holton, joined me in a search through the LFW/ILS library to find some of the early reviews I published.

I thought you might be interested in the total number of industrial laser units sold in 1986, a steep decline year for capital equipment sales (see TABLE), compared to those in Table 2 (see p. 8) of this year's report. That was then, but this is now, with unit sales having grown 27 times over 1986 numbers. If you look at the curve in Figure 1 of this year's report, you'll notice that it bears a resemblance to a ski slope. Do you think skiing was on my mind as I slalomed through this first My View of 2013?

David A. Belforte
belforte@pennwell.com

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