 If you've taken even introductory level economics or business classes, which I'm sure many of you have, this business cycle isn't going to be anything exciting or new to you. But I do like to define it explicitly again so that we're all on the same page moving forward. You can see down on the bottom I have a graphic representation of the business cycle here, those nice four colors. And starting down the bottom left hand quadrant we have phase A recovery. This is the first phase of the business cycle. And this is the first kind of sign of positivity within the business cycle. Phase A is defined as when you're 12-12 is below the zero line. So your sales or your industry or whatever, we'll just say sales from now on, are contracting on a year-over-year basis. So your most recent year of data is below the year-ago level. Things aren't great. Profits are down. But that 12-12 is rising up toward the zero line. I like to consider this the light at the end of the tunnel phase because this is when you finally see that pace of contraction starting to slow. When that 12-12 upward passes the zero line, you transition over to that green segment of this business cycle. And that's phase B, accelerating growth. This is the best phase of the business cycle. This is when your 12-12 is above the zero line and it's rising. So you're expanding on a yearly basis. Your sales are up and they're rising at a faster and faster pace on a month-to-month basis. Obviously, as much as we would like to, we can't stay in phase B of the business cycle for any definite period of time or indefinite period of time, I should say. And once that 12-12 peaks and it reaches the top and starts to decline, we've transitioned over to phase C, slowing growth. Slowing growth is what I would consider the cautionary phase of the business cycle. Things are still good. Sales are still up. You're still making money. People are happy. They're getting those raises they want. However, the rate of growth is slowing on a monthly basis. Things are getting progressively less good as we move through on a month-to-month basis. I like to consider phase C the cautionary phase of the business cycle because this is when some serious managerial decisions have to be made. As you're looking at your internal rates of change, as you're looking at your sales numbers, your bookings, your leading indicators as well, you have to ask yourself, does the backside of this business cycle look recessionary? If it looks that way and your 12-12 falls below the zero line, obviously we've transitioned into phase D, recession of the business cycle. With 2008 still fresh in our minds even a decade later, I'm sure I don't need to explain phase D recession to you in depth. And this is what we would consider a hard landing. It's where you transition directly from phase C into phase D with no sustained period of rise on the horizon. However, as is often the case, especially during times of acquisitionary times, new product releases, or within periods of macroeconomic expansion in general in the economy, you can have what we consider a soft landing. And this is where your 12-12 is declining. You're in that phase C trend, but your 12-12 reaches a trough and begins to rise again before hitting that phase D recessionary trend. This is what we call a soft landing where you transition directly from phase C back to phase B. Again, very important because there are two sets of managerial activities that you have to take if you expect a hard landing or a soft landing. Those are two different operational environments and you have to have overall two different separate strategies in general for those situations. We'll talk more in that later as we go through some of the industries of note for you. Up on my screen here now I have U.S. industrial production. I'm showing you this slide to essentially highlight our long-term macroeconomic outlook for the U.S. economy as a whole. We do use U.S. industrial production as one of our primary benchmarks for the U.S. economy. That coupled with GDP, U.S. industrial production comprises three main components. There's mining, manufacturing, and utilities. Right now, over the three of those, mining and manufacturing are expanding on a year-to-year basis and they're a nice phase B accelerating growth trend. However, we're seeing some massive signs of weakness in utilities. If you think back to last quarter, you knew we were right on the cusp of a phase A to phase B transition. U.S. industrial production was just about even with the year ago level, just about 0%. And things have been progressing nicely since then. In the last quarter, we have seen a definitive transition to phase B accelerating growth in line for long-term expectations for the U.S. industrial sector. If you look at the light blue lines on the right side of that year-over-year growth rate chart, you will see that our current outlook is calling for accelerating growth to persist through the first quarter of 2018. We expect to finish 2017 up 0.2% growth, which is healthy but modest growth. And then again, followed by a phase C transition in 2018. So we expect growth to begin to slow in 2018, where you'll see those first signs as kind of cautionary growth. However, 2018 as a whole will finish up about 1% point, followed by a mild consumer-driven recession in 2019 that we were expecting. Depending on how you relate directly to U.S. industrial production, the majority of 2019 will feel recessionary for you, but it's going to be the second and third quarters, really that middle half of the year that's going to see the deepest decline or the depths of the recessionary period. Again, this is going to be relatively minor with the year finishing down just about 1.2%, essentially nullifying the growth that we saw in 2018. Now, when we talk about our long-term forecast outlook, when we talk about our expectations for the U.S. economy marching up to four to six months, four to six quarters, for example, it's important that you don't just take my word for it. I'm essentially just talking head right now, and you don't have to take me on the face. Instead, we can look at the key ITR-leading indicators. First off, you can see the U.S. Total Industry Capacity Utilization Rate. This is essentially an index that attempts to measure how much of the machinery, how much of the equipment that is in the overall U.S. is being used in any given month. It is currently in a phase C, slower growth trend. It's a little bit to C because it was a mild trend. However, leading between six to nine months for the overall U.S. economy, this supports our expectation of upward momentum for U.S. industrial production and for any segments of the economy companies, for example, PMMI that match well with U.S. industrial production through the first quarter. That kind of nascent curl over and the total industry capacity utilization rate is support our expectations of slower growth. And so it's a positive development because essentially it says that what we've been talking about the last two to three to four or five quarters even is taking place as expected. And this is one of the first leading indicators that we would expect to see curling over supporting that phase C cautionary growth phase in 2018. Additionally, this one's not sliding over. I apologize for that. So you're going to have to use a little bit of imagination and bear with me as you shift this orange line about, you know, half an inch over to that recessionary period on the chart for you. This is U.S. industrial production compared to the ITR proprietary leading indicator. ITR leading indicator again leads the industrial sector by about six to nine months. In the last quarter we have seen three months of sustained rise, another positive indicator coming from the actual economic data that is suggesting growth through at least the first quarter of 2018. And similarly it looks like the purchasing managers index doesn't want to slide over visually for us either. I apologize for that. The marketing managers index, or PMI as you often hear called in the news, is a great indicator to look at when you're looking at the kind of 12 months kind of one year outlook for the U.S. industrial economy because it's based on a survey sent out to purchasing executives that asks them about current market conditions and current corporate conditions. What I mean by that is it asks them about profitability, whether it's up or down compared to the last month. It asks them about inventories. It asks them about rates of new orders, sales. Things like that have been our actual real quantifiable economic data. It's important to note that while this is a survey, it's not based on how these executives feel or what they think is going to happen because obviously that can be very misleading. If you were with us during last quarter's market forecast update, you did hear that the PMI curled over in line with our expectations of an early 2018 cyclical peak for U.S. industrial production. But you can see that in the last three months, we saw two months of actually pretty sustained rise before it has once again curled over. Based on the data we've been looking at, we do expect that this phase C transition will persist, that it will transition back to curling over as we expected. But with that 12 month outlook, we're also signaling that there might be more robust growth on the horizon for us and that this accelerating growth that we're expecting could persist into mid to late 2018 as well. Now, it's important to mention that when we are looking at leading indicators, either for judging company sales or an industry or the economy as a whole, we always look at baskets of leading indicators. We like to look at five to seven for any given industry and at any given time, one leading indicator may be given what we consider a false signal. We'll see some aberrant behavior. It jumps up, it jumps down, for example. And until we see corroborating evidence of the other leading indicators, you don't want to make any operational or managerial changes to your outlook because, again, you don't want to act on bad data. Now, it's too early, again, to see if this jump in the PMI that we expected is bad data or something aberrant or if it is a stronger, longer trend within the U.S. economy and we'll have to wait and see what the other leading indicators have to say over the next one to two quarters. But if anything, it is showing some upside potential to 2018 which after 2016 is very good for all of us to hear and news that I'm happy to present. Chris, this is Rebecca. It does appear that the slides are populating correctly. We should be on the U.S. non-defense capital goods new orders slide now. Is that correct? That's correct. Okay. Yep. It does appear to be populating correctly. If anybody has any issues seeing any of the slides, please leave a comment in the bottom right hand of the screen and I will see if I can get that corrected for you. Great. Thank you, Rebecca. Please don't hesitate to speak up. We want to make sure that we're all on the same page here and looking at the same data, unless we confuse each other. So as Rebecca pointed out, now we're looking at U.S. non-defense capital goods new orders. Again, this is kind of a confusing term here about what this is, is B to B activity. This is capital investment, business investment. The reason I'm showing you this is because it has recently transitioned to phase B accelerated growth. You can see in this light white line, which is a little difficult, this 312 quarterly growth rate as a more reactive metric. You can see that it is outperforming the 1212 that we are seeing another at least one to two quarters of economic momentum within the business to business sector. And this is important to note because really over the last two years, especially as we move through the commodity price crash of 2015 and 2016, where we saw metal prices tank, where we saw obviously oil prices fall through the floor, one of the sectors that was really hit with capital investment. People weren't buying large machinery. They weren't buying farm combines. They weren't buying long-range hauling trucks if they could help it. They weren't buying new mill equipment because the pricing level had dropped so hard that we saw that deflationary environment when it came to the standard industry sector that the return on investment on those pieces of equipment that cost $50,000, $200,000, even $400,000 simply wasn't there. And one of the reasons we saw that rise in the capacity utilization rate is because corporations are being forced to learn to do more with less. They were running their machines hot. They were running them in a more aggressive pace for longer. And we're finally seeing some of those pressures ease. Steel prices are back up, copper prices up. Oil, you know, moderately rising, for example, inflationary pressures are taking hold. And that's helping to stimulate capital investment. And this reinvestment in our productive stock within the U.S. economy is one of those factors that's driving manufacturing growth in overall industrial rise right now. So, again, another positive development since the last quarter. And in general, I hope you walk away from this presentation with a fairly optimistic outlook because the majority of the leading indicator evidence, the majority of the indicators that we're looking at here today are suggesting that things are strictly better than they were a quarter ago and they're looking good through 2018 as well. And now here we have U.S. gross domestic product and there's a little bit of a dichotomy between the industrial sector and a lot of the pain that you and your colleagues may have felt over the last two years and what the data is saying when it comes to gross domestic product or GDP as it's commonly called. It is the most holistic capture of economic activity within any nationality. It essentially sums up everything that we buy and sell and produce within a country. And you can see, if you look on the left, we have the 12 MMTs, so the actual dollar value. And the last time that we saw that dip for a significant period of time was in 2009 in the wake of the financial crisis. Since then we've seen almost nine years of sustained economic growth consistent year-over-year growth. The reason I point this out is because, you know, nine years of positivity, nine years of expansion isn't what a lot of you have felt and it isn't what you hear a lot of times from, you know, major news outlets, from major talking heads and political pundits. They talk about, you know, the weakness within the American economy. They talk about the slack. But it is important to realize that we have seen some fairly sustained, if not always rapid, growth over the last nine years. We expect 2017 to finish up not quite 3%, 2.5% to 2.8%. Again, followed by slower growth through 2018 and on a GDP basis, that recession that we're seeing in the industrial sector is really just going to be about zero growth. It's going to come to a stop for a bit but not contract. And the reason for that is important to realize. When it comes to the disparity between U.S. industrial production and GDP as a whole, we want to break down some of the major spending groups within the U.S. economy. So here we have US GDP by consumption. At 16% in the red, you see business investment. That's that non-defense capital goods new orders. It's been hurting over the past two years. But it's finally gaining some steam. After that we have government spending. That's 17% of the overall U.S. economy. You know, I think one of the reasons that we always get to see sustained economic growth is because you can always count on the government to spend our money when they need to. But finally, 67% over 2 thirds of the U.S. economy as a whole is dictated by personal consumption. So that's, you know, what we spend at Walmart. That's what we spend on Amazon at the gas station. All of the things, all the money that comes out of our pocket that we use to buy things with, that's personal consumption. So consumer activity makes up over 2 thirds of U.S. total economic growth. And the consumer has been doing pretty good. Here we can see a graph of U.S. private sector employment and millions of jobs. So this is the total jobs within the private sector of the U.S. economy. This excludes farms and government jobs for anyone who's curious about how this data is aggregated. And you can see that it's been rising consistently since 2009, again, since that last economic recession. And in fact, it is at record levels. Job growth is currently in a phase C. It's slowing a little bit, but it's up 1.7% year over year. Pretty healthy. Job openings are in phase B, accelerating growth. And they're up almost 3%, which is excellent news for the U.S. economy. What that says is that the labor market is still tightening, right? We are adding more jobs. We're trying to fill more positions than U.S. consumers can actually take right now, suggesting that upward pressures are going to be seen on wages. But also, it's saying that involuntary part-time employment, also known as part-time employment for economic reasons, is currently in phase D recession. If you remember three months ago, it's been in recession for the last almost five months. That's great because these part-time employment for economic reasons jobs, you want to think of these as your cashier jobs, your fast food jobs, your low-level retail jobs that aren't necessarily economically viable in the long run. People generally take as kind of a last resort when they can't find something else. So that phase B job opening, and that phase D involuntary part-time employment is really saying that those of us who want jobs, U.S. consumers who want jobs are finding jobs, and the jobs they're finding are pretty good jobs. The quick rate is also rising. And again, it's been rising for some time now. Consumers becoming, or laborers, I should say, are becoming more secure in their positions. They're seeing these unemployment rates fall through the floor. They're hearing about rising wages. They're hearing about people getting promotions out of their places. And the danger of them becoming unemployed for a long time, long-term unemployment from quitting their job, is going down. So they're moving into that city that's been attracting them for cultural reasons or nightlife. Or they're raising a family and moving out to the suburbs so they know they can find a job but they don't need to be in an economic hub anymore. Or they're going to a competitor who's offering more competitive pay. So very good for the U.S. employee. And you can see here why. U.S. median weekly earnings, deflated, so that means accounting for interest, are rising near their record levels. They take down in the last quarter or so. But you can see that these are pretty seasonal and they tend to do so moving into the winter months. But as that quick rate rises, as median weekly earnings go up, I hope most of you are thinking, oh, no, that's not great. Because again, as median weekly earnings go up, as wages go up, that means that you're paying more out of pocket where profitability gets impacted. As well as the quick rate rises, you start seeing retention issues in an already tight labor market where it's very difficult to get skilled labor. These are what I consider positive problems. They are a result of economic expansion. They are a result of the average American doing better than they were last year. However, again, they also come with some downside risks to corporate operations. And it's vital that you keep these in mind. You keep the upside in mind and you plan for sustained growth, while also accounting for or mitigating some of these negative headwinds that come with such growth. I told you that you might be confused to have seen prolonged economic growth based on what you're hearing in the news. And so this is another, what I like to consider, narrative that we hear very often on the political scene, that we hear very often at newspapers, news shows, the death of American manufacturing. You know, it's almost, you want to put it in all caps, like it's its own entity at this point. And you can see here corroborated in green, we do have manufacturing employment compared to private sector employment in orange. And while private sector employment is near or at record levels, manufacturing employment is actually near record lows. So this dichotomy here, right? People are finding jobs, but those jobs aren't manufacturing jobs. In fact, we're losing manufacturing jobs. Really does feed into that narrative, hey, American manufacturing is dying. You know, we only have half the manufacturers that we used to 20 years ago. Well, as is oftentimes the case with economic data, it's not that cut and dry. And the reason I say that is here you have US total manufacturing production. So as opposed to how many people we employ in the manufacturing realm, this is how much stuff we actually make, right? How much output we put into the nation and the world as a whole. Again, it is rising. We saw it stronger than average seasonal rise this year, which is a good song showing that factory employment is finally picking up. And it's just about at the peak level that we saw in the run-ups of the 2008 recession. So again, we're actually making almost as much stuff as many manufactured goods as we have at any other time in history, including what is widely seen as, you know, a nationwide bubble in 2008. So why the difference here? How do we rectify losing a significant amount of manufacturing jobs and also nearing record output? Well, it comes down to the fact that we are a capital-intensive manufacturing society. And what that means is that we rely on high-tech goods. We rely on cutting-edge practices, both, again, technological and operationally, to make our stuff. That's how we compete on the global stage. The converse of that is a labor-intensive manufacturing society. That's your China, that's your Southeast Asia, that's your Mexico. That's where instead of investing large amounts in capital goods and equipment and machinery and technology and process streamlining, they invest in labor. They have lots of people who do low-skill, large-volume work. And it's important that you keep that in mind that we are a capital-intensive society. Because what I have here is the 2016 Global Manufacturing Competitiveness Index. This is sourced from Deloitte, based on some research they did. And it goes to show, essentially, who the most competitive producers are on the world stage. As of the end of 2016, you can see that China took the number one spot at a perfect 100 on the index. The U.S. and Germany falling up closely behind. However, what they also found is that when it comes to determining global competitiveness on a manufacturing basis, talent is the most important driver of a country's ability to compete. That's what sets you apart. The creme de la creme is the talent and the people that you have. And as I said before, we are a capital-intensive society, which also means that we invest much more resources in our workers. People who work on manufacturing lines in the U.S. are much well-versed, much more well-versed, excuse me, in software, in running automation, in repairing automatic equipment, for example. And they also tend to be much more educated. That's a plus in our favor in the long run. After that comes cost competitiveness. How cheaply can you do things? We don't win there. Repair workers well, we have strong social security nets, for example. We guarantee a certain wage, and all that drives up our costs. Again, that's only the second-most influential driver. By 2020, the United States is poised to knock China off of their pedestal and actually by a larger margin and take back that number one manufacturing trophy, essentially. And the reason I want to say that is, again, it's to kind of eschew the headlines. Don't worry about what the talking heads are saying so much, but instead look at the actual data. We are still a global manufacturer of powerhouse. And in the long run, we have the demographics and we have the people to be poised to become the single most competitive manufacturer in the world. So if you will talk about India, China knocking us out, they are only falling down that list, barring massive structural change within their politics and their economics. And now, with the developments over the last month or two, especially when we come talking to manufacturing before we jump into commodity prices and where they're going, we hear a lot of questions in it and we have to discuss the hurricane season. Hurricane Harvey, hurricane Irma. Obviously, tragedies of an incalculable nature, the loss of life, the loss of security, loss of possessions. But moving away from that, we are the dismal scientists as economists. So our job is to look at the impacts of these tragedies on an impersonal basis and try and quantify that. Well, when we look at bad hurricane season, the first thing we think to benchmark against is Hurricane Katrina. We look back and what we saw ultimately was a regional impact to GDP, even as bad as Katrina was, which Harvey and Irma aren't looking to, you know, kind of pass muster in that regard, thankfully. Hurricane Katrina wasn't enough to move the national GDP ticker in any direction sustainably for any serious period of time. Oil and natural gas prices spiked as the gold's cut hit, but they normalized within three to five months, mostly. And in fact, we're already seeing energy prices and oil and gas prices stabilize already within just one or two months. So primarily, the importance of dealing with hurricane season is dealing with supply chain disruptions. If you sell into the Gulf region, you know, you're going to need to account for the fact that they're going to be strapped for cash as they rebuild. If you buy from the Gulf region, you're going to have to start looking for other suppliers if your supply chain has been hit. But more importantly, dealing with hurricanes shouldn't be or any natural disaster shouldn't be a reactionary environment. It shouldn't be something that you look after the fact and say, huh, yep, I have to deal with that. Instead, this is an opportunity to harden your supply chains, to broaden your customer base, because hurricanes are a fact of life. They will come again. I can't tell you when. You know, weathermen are regarded as probably the only more reliable forecasters and economic forecasters, so it's always nice to take a shot at them. But hurricane season will hit with the vengeance again. And you have to make sure that your supply chain and your consumer base is able to withstand that blow at least for two quarters, because that's generally how long we take to see economic activity get back up on its feet. And as I mentioned before, industrial production and improvement and returns and manufacturing around, commodity prices are up. We've seen this chart before, no surprise here. Copper, zinc, aluminum, lead, tin, and steel all up on a year-over-year basis. But importantly, over the last quarter, we've seen these rates of change curl over and they're moving back toward the zero line. What that means is that we've already seen the lion's share of gains in the majority of base metal commodities over the last six months. The second half of 2017, and really the last quarter of 2017, I should say, followed by early 2018, will see some rise in commodity prices, but it will be more of a stabilization than we're used to in the last six months. And obviously, that's important because as commodity prices rise, as oil and gas and energy prices tick back up, as wages rise, we see inflation. Here we have the CPI, the consumer price index. That's an orange. And then the PPI, the producer price index in blue. The consumer price index is basically an inflation index used to measure how much more it costs for an end user to buy something, for example, food or gas or an iPhone. Whereas the PPI is how much more it costs for a producer to buy their input materials. So when you see this blue rising at 3%, that's essentially a 3% hit to your bottom line. The CPI and the PPI are much watched by the US Federal Reserve for FOMC, the Federal Open Market Committee. These are the guys headed by Janet Yellen, who are in charge of setting interest rates and kind of deliberating over long-term interest rate environments within the US. You can see in blue what we saw last quarter, we have a projection for interest rates in 2017, 2018, 2019, 2020 in the arms. For each one of these members, we're in orange we have it as of September. Importantly, this needle hasn't changed. There's been a little bit of fluctuation, but we expect rising interest rates in 2018 before stabilizing in 2019 and beyond around 3%. That is a radical divergence from the low interest rate kind of quantitative easing environment that we've seen since about 2010 or so. And the reason I bring that up, again, is because we're seeing inflation rise through 2018. We are seeing interest rates rise essentially indefinitely until something happens in the economy that makes them rethink their long-term view. And we're seeing commodity prices and wages rise. All of those things that impact your profitability as an employer, as a producer, are not only taking hold, but are going to be accelerating through the majority of 2018. And if you don't account for that, at best you'll be growing your top line just as fast as your bottom line gives her. You'll see basically zero profitability despite sales and revenue rise as the economy expands through 2018. You have to find ways to pass off these costs or mitigate them, whether that is passing the cost on your consumer by essentially guaranteeing them that it's worth it. That's what we call finding and marketing your competitive advantage. What makes me want to buy from you, regardless of price, through investing in operational efficiencies, cross-training your employees, finding ways to do more with less to cut down on those costs. And again, so we've gone through a fairly optimistic world view as far as the U.S. economy is concerned really throughout 2018. But there are some lingering concerns. The dollar is still strong. It's a little bit during the last quarter which gave some relief to U.S. exporters. But the market fundamentals really don't show that dollar are weakening significantly against its major trading partners next year. So if you sell into foreign markets you're going to see some price competition from the Euro, from the Yen, from the U.N., for example, the Peso. That's not going anywhere. That's something that you're going to have to continuously fight in order to remain competitive. Again, positive business cycle problems, wages, labor retention, rising input costs, all of these things that come with the thumbs up, you know, phase B macroeconomic expansion aren't going anywhere. And if you've been ignoring them up until now you have to act before 2018 otherwise you risk losing out on all those returns compared to your competitors. South American stability is being called into question. We've seen the riots in Venezuela, the Petrobras scandals in Brazil, both in pretty significant recessions right now. If you're selling into South America it's going to be a tough climate next year or so. These countries, which are some of the largest in South America, have significant political and structural reforms that they have to go through before they become viable end-use markets for most major U.S. producers. So if you're exposed to these guys it's going to be tough for a year or two. You have to start thinking about finding ways again to reduce cost to make yourself viable in nation or finding other major creating partners and diffuse that weakness. And then ultimately in this one again we've been talking about really all year lingering global uncertainty, NAFTA, North American Free Trade Agreement that's been on the chopping block for a while since President Trump took office. It's looking like changes will be made to NAFTA. If it was ripped up in its entirety I would list that as something that is very concerning for the North American economy as a whole. We've seriously benefited from cheaper goods that have helped us again remain cost competitive and keep those inflationary pressures down by dealing with our major trading partners by letting Canada and Mexico do what they do best buying their goods and doing what we do best. But it's yet to be seen if any changes to NAFTA may in fact be of that benefit for the U.S. That's something that we're going to have to sit and see and see what comes out of Washington. Brexit and really anti-globalism in general is something that we've been following through 2017, 2016 to a lesser extent. And that's really not going anywhere again. Any decline in globalism is likely going to hike prices, reduce purchasing power, and ultimately lead to a global drag. And now that we've gone through kind of the broad strokes of the U.S. economy, I want to jump into some of the industries of note that we prepare for you in your PMMI quarterly update. Here we have food and foods preparation production. Currently up 2.5% year over year it is in a phase C trend but it's moving to the side more than it's moving down. It's actually been outperforming our expectations during the last quarter. Our long-term outlook remains in place. But if you're involved in the food packaging industry you're likely going to see a boom through the rest of 2017 into early 2018. Most importantly we're going to finish 2018 down up excuse me 1.2% and we're not forecasting our recession moving through 2018 into 2019. A lot of the strong consumer trends that we've been following, those wages and all of that have put money in the U.S. consumer's pocket and when the U.S. consumer has money in their pocket they eat and they buy food. So again if you're in this industry it's a good outlook for the next three years. Things will slow in 2018 into early 2019 before ticking back up at the end of the year. Beverages, coffee and tea production. You'll see here on our charts there'll be an orange line and a blue line. There's a significant Federal Reserve Board data revision to many data series that we follow since the last report. You can see in orange what the previous data trend looked like, what those previous trends were. Followed by in blue were they at now. It was in the back side of the business cycle as of last quarter, a phase C decelerating growth trend but their historical data revision did pull it into phase D recession. On the plus side it is rising. In that phase A recovery trend and we still expect to finish off 2% point a year over year at the end of 2017. So the momentum and the timing has changed but ultimately our expectations for year end aren't radically altered. Followed by accelerating growth throughout 2018 and slower growth moving into 2019. We will look at some minor possible recessionary pressures moving to the end of 2019 early 2020 but right now it looks like it will suffer from a relatively soft landing. Pharmaceutical and med device production. Again, you can see these orange lines. I won't call them into question again unless they were significant. You can see that the trend remained relatively unchanged and seriously threatened our long-term outlook. Currently in phase D recession down 2% point a year over year. Going to finish the year down but in phase A recovery followed by acceleration through 2018 into early 2019. Area of concern we will see another recessionary period moving into 2019 in line with the macro economy. So if you sell into the med device area it is going to be a story of really maximizing your returns in 2018 in order to not only recoup your losses this year but also shield yourself from the recession that's coming in 2019. Of note however during that recessionary period the 12 MMT will remain above the current level so it will nearly be as severe as what we've seen over the past year. Very similar trend here in a related market U.S. personal care products production. This is more if you imagine med devices sold into a CVS or a Walgreens or a local pharmacy. Currently in phase D recession down about 2.8 percentage point a year over year. Recession will persist through early 2018 before acceleration takes hold finishing up the year about 2.5 percentage points and again we're forecasting a very mild recession moving into 2019 so marketing your advantages really capturing market share in 2018 as things pick up. It's going to be key to maintaining a long term strategic position in this market as you move into 2019. Chemicals and cleaning products production this includes your soaps, your bleaches as well as your industrial chemicals. Currently in phase B accelerating growth up 1.8 percent year over year. We expect that acceleration to persist into 2018 finishing 2017 up 3 percent followed by recessionary pressures brewing by the end of 2018 and a very mild recession throughout the majority of 2019. Important to note that if you look at the 12 MMT any recession here is really going to feel more like a market stagnation and simply suggests that you'll have to strive a little bit harder and invest a little bit more in order to capture market share as the economic growth really won't be rising up to meet you as you progress through late 2018 and 2019. Durables, hard goods, components and parts production another kind of mouthful of a term but basically this is any good that lasts for more than three years be it machinery parts be it automotive parts, be it kitchenware computers for example furniture is another big one. Currently in phase B accelerating growth but it's really moving sideways and will continue to do so throughout 2017. It'll mostly avoid recession there might be some minor headwinds that you encounter over the next three quarters before things pick up through the majority of 2018. Again minor forecast in 2019 but it's important that you kind of lead with optimism in this regard especially as far as it goes for consumer durable goods which are outperforming right now any weakness you see, any tick down likely going to be temporary and we expect overall rise throughout 2018. So it's vital that you don't pull back on your production or pull back on your marketing costs until you see prolonged decline in demand moving to the end of 2018. And now that we've taken a dive into some of the key markets in the U.S. I want to spend just a few brief moments zooming out and looking at what some of the global trends have to say. As far as the national leading indicators OECD plus 6 that's the organization of economic cooperation and development essentially some of the more industrialized nations in the world. The major Asian, Brazil, Canada, China, and Japan all up all between 6 to 12 months of positive momentum for these industrial production indices as far as the leading indicators go. The PMIs look out a little further still up but you can see that they are turning that corner just like we expect to see in the U.S. PMI suggesting that the slower growth trend in 2018 and those recessionary pressures that we expect to be brewing in 2019 are going to be a global event mild, nothing to be overtly concerned about but they will be a global event. When it comes to North America a lot of green again, leading with optimism from the U.S. through 2018 Canada up 4%, Mexico lagging a bit behind but we do expect 2018 to be a growth year with them. I plan to see some marginal capital investment or some slowing capital investment in Mexico over the next 6 months to a year as again some possible concerns about opening up factories with the potential of border taxes and not being wrapped up or ripped up I should say are still on the table but overall the economic growth will return in 2018 but again, stay tuned for any potential political developments. Now with South America as I mentioned earlier very much a mixed bag. Argentina Peru, Colombia doing pretty well Brazil, Chile down significantly, Venezuela taking a hit although it's not shown here with most recent data where you see red in South America there are going to be long term prospects through 2018 these recessions are going to be relatively deep and persistent so act with caution if you choose to play in this area much more green great to highlight some of that Eastern Europe growing in a much faster clip than Western Europe you can see 8%, 3%, 5%, 6%, 7% in the east followed by more lackluster 1%, 2%, or 3% growth rates in the west France notably one of the laggards at 0.8% UK at 1.0% not terrible those faster growth rates that we look at in Eastern Europe are pretty normal fare for the game they are less mature markets and do tend to see faster growth and faster decline moving through the business cycle Norway one significant nation of concern again all of the major petro nations are going to have some troubles over the next 3 or 4 quarters as they recover from that oil price slump in the lower for longer oil prices that we are looking at but nothing structurally concerning as far as overall Europe goes moving through 2018 Asia as well almost all green China was in control of Chinese data earlier this year they were in a phase C slower growth trend kind of waffling around 6% they have kicked their economy into gear their consumers have started purchasing with Augusto their central bank has taken some inflationary actions and all of that has really driven that phase B accelerated growth trend that we see coupled with growth in India really as far as China and India go if they are doing well their neighbors are doing well China, India especially are going to be growth opportunities through 2018 in line with what we are expecting for the global economy in the US particularly as a whole selling into Australia presents a little bit of a risk coal is going out the window it has recently been replaced in the US by natural gas in many European nations as the primary or the old primary source of energy it is falling out of favor again natural gas is cheaper it is cleaner and it is here to say as the world's major coal exporter their mining sector is going to feel some pain moving into 2018 but overall we do expect the transition to the front side of the business cycle by year end 2018 and now finally if you have been following along this year this slide hasn't changed really over the last year or so I think actions to take before the 2019 recession and I'm leaving this here to highlight that managerial acumen if you want to call it that has to be an active game as we approach this 2019 recession it's not enough to know that it's coming know that it's coming simply you have to know that it's coming and do something about it and these are some of our general management objectives that once you find out your position in the market where you relate to the major reading indicators some actions you should take moving through 2018 in order to shield yourself in some of the negative effects again I know we're running up on time here and this is old half for many of you so I'm going to leave this slide up here and when it gets distributed I encourage you all to take a look at it to disseminate it to your managers, your sales force really everywhere within your corporate structure in order to make sure that you're all on the same page and with that I'm going to turn it back to you Rebecca for any questions that I can field Chris thank you so much for the great reflection of the current economy and issues at hand for packaging and processing industry like Chris said we're going to open up the session to questions if you have any questions that you'd like to have answered you may type them in the message or chat box at the bottom right hand side of your screen or you can press star 2 to unmute your phone and we'll give it just a moment here to see if any questions come through I'd like to take this time to know Rebecca for everyone involved here if any questions come up with you or your colleagues in the days to come or Rebecca upon distribution of these slides you can always email your questions to us directly at questions at itreconomics.com with the subject header PMMI thank you for that Chris and if any other questions come up and you by chance don't have that email you can also feel free to email me Rebecca Armarquez at PMMI.org or Paula Feldman P. Feldman at PMMI.org with your question and we'll make sure it gets over to ITR for Chris to review and provide an answer and it looks like today we don't have any questions so we can conclude the webinar Chris thanks again this was a really great and comprehensive report on behalf of PMMI thanks everyone for participating today as a final note you will receive an email to complete an evaluation on today's webinar please take a moment to let us know how we did and if there's any way we can improve the webinar and that will be posted on PMMI.org you will also just be receiving an email from me for that brief survey and once again thanks everyone for participating have a great day