On 'Severity Index' Recession Was Only Slightly Worse Than Average

By John S. McClenahen Admittedly, some executives would contend that the 2000-2001 U.S. manufacturing recession was really a depression and assert that not much of a recovery has yet taken place. But among the 10 manufacturing recessions that have occurred since 1948, the most recent downturn ranks only slightly more severe than average, says Jeremy Leonard, an economic consultant to the Arlington, Va.-based Manufacturers Alliance/MAPI, an business-policy group. On his "severity index" for post-World War II manufacturing recessions (average =100), the June 2000 through December 2001 recession registers 108. That's higher than the 72 for the March 1990 to March 1991 manufacturing recession, the postwar's least serious, but much lower than the 142 for the November 1973 to April 1975 manufacturing recession, the deepest since World War II. At 18 months, the most recent manufacturing downturn, however, is the longest in postwar history, a factor that has made it seem more severe, contends Leonard. A sluggish recovery is a second factor that's made the recession seem worse, he states. "Current consensus forecasts suggest that manufacturing production will take until approximately November 2003 -- at least 22 to 23 months -- to regain the output lost between June 2000 and December 2001."

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