Upbeat year-end Upbeat year-end

The major stock had a fairly indifferent year in 2004, compared to the sharp recovery of 2003. The Dow managed an increase of just over 2 %, while the UK's FTSE 100 Index and Japanese Topix 500 did better with gains near 7 %. Regular readers will not be surprised to see that IC's Index of crane manufacturers had a stunning year in 2004. The Index rose 22.74 % over the 12-month period, touching all-time highs along the way.

Despite the relatively low gains over 2004 as a whole, stock markets did at least finish the year heading upwards. Between week 48 of 2004 and the first week of 2005, the Dow moved up 0.98 %. The FTSE 100 was better with its 1.49 % gain, while the Topix led the field with a 4.82 % rise.

The IC Share Index also gained ground, although its rise of 2.95 % was subdued in comparison to its usual bullishness. The Index did however hit a new all-time high in the last week of the year at 217.31 points.

Strong gains

As the Index's movement suggests, there were mixed results for crane companies' shares in the weeks under review. Palfinger and Hitachi both performed well with their double-digit gains. Palfinger's improvement is particularly noteworthy compared to its position at the start of 2004, when its shares were worth only about half their current value.

There were moderate gains for KCI Konecranes and Kobe Steel, but the other three components of the index, Manitowoc, Tadano and Terex saw their stocks slip at the end of the year.

Having said this, 2004 as a whole was positive for all the companies in the Index apart from Hitachi (which had a stellar year in 2003). The gains by Palfinger and Terex were particularly striking, but the other four companies also beat the markets by significant margins.

Bottomed-out?

The end of 2004 also saw the Dollar find some stability following its dramatic nose-dive in the earlier part of the final quarter. It gained a little ground over the Pound and Yen between weeks 48 and 1, and only dropped a fraction against the Euro.

Many companies outside the US will be hoping that the Dollar dive has bottomed out. It is too soon to say which way the currency will go in 2005, but companies trying to export to the US, particularly those in the Euro-zone, will be of the opinion that arresting the decline is not enough.

They would like to see the Dollar regain the strength it had in 2002, when it was valued around one-to-one parity with the Euro. Of course many export-orientated US companies will think exactly the opposite.

The low Dollar makes their products cheap on foreign markets, so they have the scope to both cut prices and increase profits.

Outlook

Many of the themes dominating the economic picture in 2004 remain in the frame for 2005. Commodity prices, particularly oil and steel, remain painfully high and there needs to be both an increase in supply and cooling in demand around the world before the situation improves. This in itself is a complex problem, which relies on further cooling of the booming Asian markets as well as the need for more geopolitical stability in the Middle East, among other issues.