NAM: Manufacturers See Positives Ahead

Compiled By Jill Jusko While current economic indicators continue to deliver mixed messages, manufacturers see signs of an upturn later in the year, says the National Association of Manufacturers, Washington, D.C. The industrial trade association on May 29 delivered the results of an informal survey of its membership conducted this week, as well as its report on the state of the economy. The report concedes a currently gloomy present, yet positive future trends, while the survey suggests a "clear upward" trend in orders. Fully 40% of survey respondents reported increasing orders in May and 24% reported declining orders. In April 56% of survey respondents reported falling orders. The NAM outlook paper concludes that faster economic growth will occur in the second half of the year. "An analysis of the mixed positive and negative forces impacting manufacturing suggests that low inventories, improving credit conditions, lower energy prices, a more competitive dollar exchange rate, increased defense spending, and tax cuts will improve business and manufacturing in the months ahead," says NAM President Jerry Jasinowski. "Among the most positive forces for manufacturing recovery is improving liquidity and credit conditions." Among NAM's forecasts:

  • Business investment in capital equipment and software will increase by 9.5% in the second quarter of 2003, 8.4% in the third quarter and 12.8% in the fourth quarter -- resulting in an overall annual increase of 6.4%.
  • Exports will rise by 5.5% in the third quarter and 9.3% in the fourth quarter.
  • Due to improving investments and increasing exports, manufacturing output will increased by 3.6% in the third quarter of 2003 and 5% in the fourth quarter.
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