Kiplinger Connection
Business Outlook • Business Costs • Business Tech

Business Outlook: Here are some businesses currently thriving.
Business Costs: Steel will be double by July, then ease in fall.
Business Tech: Management and anti-hacking systems to consider

Business Outlook
Even as the U.S. economy falters ...
Plenty of companies are thriving.
Some winners are relatively obvious.
Energy and agriculture are doing well because prices are high and demand is strong.
Exporters benefit from the weak dollar and strong growth abroad. That group is diverse and ranges from defense to soft drink makers to computer firms. Sales of PCs, for example, are up only 3.5% in the U.S. but 15% worldwide.

Other winners are much less apparent, including companies that sell to other firms. Signal Metal Industries in Irving, Tex., says business is booming as steelmakers and miners buy heavy equipment. Click Bond in Carson City, Nev., runs at full capacity to keep up with demand for airplane fasteners.
Some gain at the expense of others.
Business is brisk for debt collectors, auto repossession firms, credit counselors, and companies that clean up foreclosed homes.

Auto repair shops are busy as consumers put off buying new cars. Families trying to save money will shun fancy restaurants for fast food. They’ll also eat at home more often, adding to sales at grocery stores.
Campgrounds, rental-home owners and parks expect a good summer as vacationers seek cheaper alternatives to hotels and pricey activities.

Other firms have niches that seem immune to economic downturns.
Health care stays strong, especially with an aging population.
Demand for video games and other electronics is still high. Parents still buy all kinds of toys. Women still use skin care products.
Contractors for governments at all levels see lots of growth. So do lobbyists, as their clients fight harder for scarce tax dollars.

Garbage is big, too. Al-Jon, an Iowa firm that makes compactors and machines to separate scrap metal, increased its staff by 60 last year and needs even more workers to handle growing demand for its products.
Spending on pets is expanding, helping retailers such as Petco. Pet health insurers are seeing surging sales, with revenue from premiums set to increase 25% this year and probably for every year through 2012.
Tutoring services in math and English say business is solid.
Lawyers are also busy as mergers increase. Plus legal work involving regulations and many foreclosures and bankruptcies to handle.

Business Costs
How much higher will steel prices go this year? Quite a bit.
Expect to pay as much as $1,200 a ton for hot-rolled steel and $1,300 for cold-rolled by July, about twice the cost in January.
Car, truck, and tool makers will get walloped by the spike, with no relief likely before fall.
Ditto for highway and home construction firms. And with the economy so weak, these companies can’t hope to pass along costs to consumers.

Why the sudden hike? Blame the anemic dollar for much of it. Foreign suppliers of iron ore, coal, and coke ... key ingredients for steel ... are raising prices to offset the buck’s decline.
After summer’s peak, hot-rolled prices will fall to $900 per ton by Dec. and to $650 during 2009. That assumes the greenback bottoms out soon, that China and India don’t suddenly decide to ratchet up manufacturing, and that labor problems don’t shut down coal or iron mines in Australia.

Business Tech
Consider software available online to run your business.
It’s convenient and productive, though not necessarily cheaper. Vendors are offering Web versions of enterprise resource planning (ERP), which manages bookkeeping, personnel files, orders, sales, and forecasts.
It can be customized and kept relatively secure from hackers, with firewalls to keep employees from going where they’re not allowed.
Firms with 50 to 500 workers can check SAP’s Business ByDesign. It costs $149 per user per month ... less for infrequent users. Other Web-based ERP vendors include Oracle, Epicor, and Eresource ERP.

Hackers are becoming more aggressive with business Web sites. They’re increasingly going after small companies, taking over their sites and then stealing identities and credit card numbers from customers.
Companies need to keep protective software updated at all times.