If you're looking for a gauge on the outlook of the economic landscape, energy and material companies are a great place to start. Forming the basis of nearly every product sold around the world, these companies usually provide hints of where the market is headed before consumer and technology sector results begin to display the trends. That's why we're providing you with the outlooks from three key Dow Jones Industrial Average (DJINDICES: ^DJI ) components, straight from the microphones of two CEOs and a vice president of investor relations during their latest earnings calls.
Alcoa (NYSE: AA ) Chairman and CEO Klaus Kleinfeld provided the greatest market color of the bunch when he highlighted specific sectors that should contribute to growth in 2013.
Let's start with the U.S. We continue to see the production growing. By 2013, we expect 0% to 4% here. This is a slower growth than the last year, which was 16% to 17%, but it is on top of the 2012 production numbers, obviously. So that would put production in 2013 roughly at 16 million vehicles, which is close to the pre-recession levels. ... On the European side, automotive, we will continue to see a decline. We expect 1% to 4%. This is substantially better than last year, where we saw 6% to 8%. ... On China, we continue to expect strong growth, 7% to 10% in 2013, above the 6% to 7% that we saw in 2012. This was mainly driven by stronger SUV sales -- the wealthier middle class plays into it -- as well as the general uptick in the Chinese economy.
For 2013, we believe the growth will continue in a 9% to 10% range. We believe that because there are a couple of factors backing this: 8,900 large aircraft and a backlog for Boeing (NYSE: BA ) and Airbus alone. That's more than eight years of production backlog.
Alcoa's expectations for the remaining three sectors -- heavy truck and trailer, beverage can packaging, and industrial gas turbine -- are a bit more subdued. Overall, though, 2013 looks like a year of improvement for the aluminum sector because of strength in the end-user market. His final estimation is 7% growth in 2013 versus 6% in 2012.
Chevron (NYSE: CVX ) Chairman and CEO John Watson spoke about his company's bullish outlook for oil, and the North American market in particular. Those in the energy services and materials companies that provide the metals and chemicals necessary to build the required equipment and infrastructure will surely cheer these sentiments:
"We are investing in a big way in the United States, of course, offshore with our developments at Jack/St. Malo and Bigfoot and the exploration program that we have in the Gulf of Mexico."
On the recent margin expansion for U.S. refiners and a possible acquisition in that space, Watson said:
"Over time I think these markets will equalize, and so making investments that aren't quite compatible with the strategy in the downstream to take advantage of what we think will be a short-term phenomenon really isn't something we are looking to do."
Finally, ExxonMobil's (NYSE: XOM ) David Rosenthal, VP of investor relations, also referenced activity in the Gulf of Mexico quite a bit during the company's Feb. 1 call. Unlike what Chevron said, however, he spoke favorably about the refining margins Exxon has experienced in its downstream sector:
"As we look at just our U.S. Gulf Coast refining circuit, we have more than tripled the processing of advantaged North American crude over the last couple of years... Additionally, we have plans for an active exploration program in the Gulf of Mexico during 2013."
Key Foolish takeaways
While Chevron and Exxon preferred to delay much of their individual outlooks until their investor days, Alcoa provided a fairly in-depth outlook for several industries that have far-reaching affects on global GDP. For the two energy components discussed here, each one's focus on growing production hints at increased energy demand, which generally stems from consumer and industrial spending. Using these viewpoints to form a mosaic theory can benefit any investor eyeing sector- or stock-specific investments as buy, sells, or holds. Stay tuned to Fool.com as we dive into individual energy and material sectors to find out what certain companies are saying about the future.
With 7% growth expected in the 2013 aluminum market, is now the time to invest in Alcoa?
Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Representing 14.7% of 2011 global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospective and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant, simply click here to get started.