Manufacturers predict flat growth or contraction
Chicago, Ill. -More than 80% of 327 U.S. manufacturers surveyed in mid-February predict stagnant growth or recessive contraction in their industries during the first half of 2001 and weak capital investments and earnings for the whole year, according to the National Association of Manufacturers' (NAM) annual survey released March 5 at National Manufacturing Week (NMW) 2001.
'In light of their weak economic position, it's no surprise that the majority of manufacturers expect GDP growth of 2% or less in 2001,'says Jerry Jasinowski, NAM's president. 'The survey confirms the softness in manufacturing and the threat that poses to the entire economy. Clearly, we need quick action on both the monetary and fiscal policy fronts to restore business and consumer confidence and avoid a recession.'
The survey found that nearly three-quarters of respondents believe the Fed should lower interest rates another half-a-percent (.5%) at its March meeting, and they ranked reducing individual income tax rates as the most important tax policy that would have a positive impact on their firms and employees.
When asked about capital investments, 75% of the manufacturers surveyed forecast growth of 5% or less for computers, peripherals and software, while more than half forecast growth of 2% or less for machine tools or other equipment. More than two-thirds of those surveyed also predicted earnings per share growth of 3% or less in 2001's first half and then some improvement in the second half.
The respondents add that they'll aggressively cut costs at each stage (72%) and introduce new product lines (58%) to achieve greater profitability.