NMW 2002: NAM survey says manufacturers expect 0-2.5% GDP growth this year

Chicago, Ill. - Of the 312 manufacturers answering the National Association of Manufacturers' (NAM, Washington, D.C.) latest annual survey, 91.7% expect U.S. gross domestic product (GDP) to grow 0 to 2.5% during 2002.


Chicago, Ill. - Of the 312 manufacturers answering the National Association of Manufacturers' (NAM, Washington, D.C.) latest annual survey, 91.7% expect U.S. gross domestic product (GDP) to grow 0 to 2.5% during 2002. Released at National Manufacturing Week 2002 on March 18, the survey's data showed that 29.5% expect U.S. gross domestic product (GDP) to grow by 0 to 1% in 2002; 39.4% think GDP will grow by 1.1 to 2%; and 22.8% believe GDP will grow by 2.1 to 2.5% this year.

Meanwhile, 40.4% of respondents expect recession, or negative growth, in their own industries during the first half of 2002, while 48.7% expect their industries to grow by less than 2% during this period.

In addition, while 27.2% of the manufacturers project that they will work off surplus stocks during the first half of 2002, another 18.9% expect their excess inventories to persist into the second half of 2002.

Also, 77.6% of respondents anticipate their firms' capital investment in computers, peripherals and software to grow 5% or less during 2002, while 82.4% project their capital investment in other equipment, such as machine tools and vehicles, will grow by 4% or less.

"More than two-thirds of respondents expected earnings-per-share for the first half of 2002 to be 3% or below, confirming that manufacturing"s emergence from prolonged recession will be slower than the rest of the economy," says Jerry Jasinowski, NAM's president. "This trend and other factors, such as credit difficulties and the overvaluation of the U.S. dollar, led 70% to say they plan to preserve profits by aggressively cutting costs.

"Not surprisingly, the top three public policy issues cited by respondents as priorities were tax relief (58%), health care (55%), and tort reform (35%). Unfortunately, most manufacturers are already so lean and mean that further economies will go well into the bone: reducing health coverage, 401(k) matching programs, even considering moving production abroad. Congress should bear this in mind when considering burdensome new regulations or other legislation."

NAM's survey document indicated that the organization's tax relief public policy priority would be "pro-growth tax relief to encourage capital formation and productivity-enhancing investments." The health care public policy priority would focus on "preventing so call 'patients rights' legislation that would allows workers to sue their employers and HMOs over health benefits disputes. More than 30% of respondents said their companies' health care costs increased 11-20 in 2001; 27% experienced 21-30% increases; and 27% faced more than 30% hikes last year. Almost half expect another 11-20% increase in health care costs this year.

Mr. Jasinowski added that the NMW survey also confirmed the result of last week's separate poll of NAM's board of directors. "Cutting costs continues to be the preferred way of increasing profit margins, followed closely by the introduction of new product lines, and an even tighter embrace of Six Sigma or lean manufacturing."

Many of the 312 manufacturers reported that these cost cuts included layoffs. In fact, 1.9% of respondents downsized by 5%; 5.1% reduced their workforce by 10%; 1.9% eliminated 15% of their jobs; 4.5% laid off 20% of their staffs; and 2.2% slashed 30% of their employees.

Control Engineering Daily News Desk
Jim Montague, news editor

No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
Control Engineering Leaders Under 40 identifies and gives recognition to young engineers who...
Learn more about methods used to ensure that the integration between the safety system and the process control...
Adding industrial toughness and reliability to Ethernet eGuide
Technological advances like multiple-in-multiple-out (MIMO) transmitting and receiving
Virtualization advice: 4 ways splitting servers can help manufacturing; Efficient motion controls; Fill the brain drain; Learn from the HART Plant of the Year
Two sides to process safety: Combining human and technical factors in your program; Preparing HMI graphics for migrations; Mechatronics and safety; Engineers' Choice Awards
Detecting security breaches: Forensic invenstigations depend on knowing your networks inside and out; Wireless workers; Opening robotic control; Product exclusive: Robust encoders
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
News and comments from Control Engineering process industries editor, Peter Welander.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
Anthony Baker is a fictitious aggregation of experts from Callisto Integration, providing manufacturing consulting and systems integration.
Integrator Guide

Integrator Guide

Search the online Automation Integrator Guide

Create New Listing

Visit the System Integrators page to view past winners of Control Engineering's System Integrator of the Year Award and learn how to enter the competition. You will also find more information on system integrators and Control System Integrators Association.

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.