Key Industries and Trends to Watch in 2011 and Beyond

Healthcare Industry

Patent Expirations and Healthcare Legislation Impact will hold the key

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The trend should favor investments in the healthcare sector in 2011 as demand generated by aging population in major developed parts of the world such as Japan, Europe and in the domestic arena will continue to boost pharmaceutical businesses. Drug Patents will continue to expire and this will create immense challenges for major brands but amid this scenario generic drug makers will get ample opportunities. The recent healthcare legislation will push U.S further to increase healthcare spending, but most of this will come into play by 2012. U.S currently leads the world in healthcare expenditure at 16% of GDP, which is way too higher than global average of 10%.

How will Financials Perform in 2011?

This sector has led the recovery from the recession and some analysts expect similar performance to continue in 2011. Profits from the industry are expected to climb past the pre- recession levels as banks are putting in tremendous amount of effort in fixing balance sheets. The key booster for this industry will come from the government stimulus money, but they will soon get back on track and regain self sufficiency.

This sector will see many changes in 2011 but the major ones from the consumer standpoint will be higher rates on mortgage loans and credit card charges.

Rising Global Food Prices could lead us into Next Crisis

What’s next for Consumer Staples?

Known for its resilience in any kind of economic environment Consumer Staples will continue to see stable demand in 2011 and beyond. But this sector will see a lot of volatility in prices due to unexpected changes in weather patterns and mainly due to rising inflation concerns globally. So far the prices have been stable domestically, but emerging markets are witnessing severe food inflation. With Fed printing money way too fast, commodity prices are continuing to soar above and there are concerns that this could lead us into a hyperinflationary scenario.

Impact of Withdrawal from Iraq & Afghanistan

Defense Spending and Growth Outlook

Cost cutting measures are the only thing we can expect. The defense industry saw a steep climb post September 11, 2001, but now all efforts are being made to windup operations in Iraq and Afghanistan, so we can expect this industry to consolidate for next few years.

Unless something unexpected changes the scenario, all eyes are set at the emerging world which is the only hope for the US defense industry as they are expected to ramp up their defense spending in years to come.

Travel and Tourism

Growth Ahead despite Sensitivity to Economic Scenario

As the economic recovery heads us to normalcy, consumers will start to spend freely. Demand and supply balance in tourism industry was hard hit by the recession and excessive inventory build up over the past many years. Now, on the back of the pace at which the recovery is panning out, we can expect this industry to regain its lost momentum and profits to trickle in. Even the airlines will see a stable growth phase after years of consolidation.

Conclusion

The key growth drivers for above mentioned Industries remain are the growing demand of goods and services from emerging markets and the continuing domestic recovery on the back of improving consumer sentiment. These industries hold good potential for growth in years ahead.

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