Uncertain moderate growth. Economists continue to downgrade their forecasts

Uncertain GDP Growth, Closed Markets, Difficult Business
Environments in Emerging Regions

Emerging markets continue to represent bright spots for rail
signaling sup-pliers. But even the economies of potential growth engines such
as China, India, and other countries in Asia are experiencing moderate growth.
Economists continue to downgrade their forecasts for GDP growth in these
countries, with China currently forecast to grow its economy by only 8.2
per-cent by 2021 and India by 6.5 percent. Uncertain growth forecasts in these
and other emerging markets negatively impact the potential for incremental
infrastructure investments.

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Emerging markets are attractive to global rail signaling
suppliers due to the availability of greenfield projects and revenues from
growing, once-closed economies. However, doing business in these markets can
often be a challenge, as the experience in China bears out.

Many global suppliers targeted China and its aggressive
build-out of high- speed rail for growth, only to find the government allows
only Chinese sup-pliers to install signaling equipment on high-speed rail
lines. Similarly, in India, the Make in India concept encourages rail operators
to buy and implement products from Indian suppliers. Global suppliers must then
partner with an indigenous supplier for a smaller portion of the sale.
Governmental initiatives to protect domestic suppliers via closed markets or
forced partner-ships are in play in other geographies as well.

Growing Manufacturing Skills Gap

Finding and training employees to operate sophisticated
equipment involves significant investments in time, resources and a dedicated
process. Retaining these employees is critical to maintaining uninterrupted
production. In increasingly competitive labor markets, attracting and retaining
talent has become a prime concern for organizations. Employers need to
understand the range of factors that influence career decisions and the role
that employer branding plays in attracting human capital that best fits and contributes
to the strategic aims of an organization.

In this market, skilled workers have a choice, and many
will tend to favor organizations with relatively strong ethical standing.
Others may be attracted by the possibility of working with recognized industry
leaders, or may simply aspire to the financial benefits. Still others may be
drawn to the excitement and agility of the traditional big players. To ensure
they attract and retain people who will add value to the business, it is
imperative that organizations plan meticulously and reward carefully.

Proactively attracting the right qualified talent and
investing in ongoing training and development programs can help keep workers
engaged, en-courage retention of skilled employees, and help companies increase
their competitiveness.