Forecast: Manufacturing Falls 0.5% In Long-War Scenario

By John S. McClenahen Joseph E. Kasputys, chairman and CEO of Global Insight Inc., a Waltham, Mass. economic forecasting firm, says there's a 70% probability that the war in Iraq will be short and successful for the U.S-led coalition. And under that scenario, his company projects 2.9% growth in U.S. GDP this year. But if the war lasts as long as six months, inflation-adjusted growth could fall as low as 1%, with manufacturing contracting 0.5%, the firm figures. Within manufacturing, under the long-war scenario, output of motor vehicles drops 14.6%, furniture falls 10.8%, apparel shrinks 9.2%, textiles unravels 9.1%, ferrous metals lose 5% and aluminum loses 4.8%.

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