Economic Risks Remain For U.S. Manufacturers' Exports

Aug. 4, 2005
Although U.S. manufacturers' export businesses are "not in any imminent danger," a combination of "a great measure of uncertainty" in currency exchange rates and "questionable growth" in the economies of major U.S. trading partners means "downside risks ...

Although U.S. manufacturers' export businesses are "not in any imminent danger," a combination of "a great measure of uncertainty" in currency exchange rates and "questionable growth" in the economies of major U.S. trading partners means "downside risks remain," says Cliff Waldman, an economist at Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group.

On a compound annualized basis, the U.S. dollar will fall an average 6% against the currencies of other industrialized countries through 2006, projects an alliance report released Aug. 4. The dollar is expected to remain flat against developing-country currencies during the rest of this year and then fall by 5% during the first half of 2006 and by 2.5% during next year's second six months.

Waldman figures economic growth among industrialized nations, a group that includes Canada, Japan and 15 European countries, will slow from 2.8% this calendar quarter to 2.45% in the third quarter of 2006. Economic growth among developing countries, a group that includes China, India and Mexico, is expected to decline from 3.2% during the second half of this year to 2.5% in the third quarter of next year.

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