NMW 2003: More than 73% of NAM members see ''manufacturing crisis''

Chicago, IL - Skyrocketing health care costs, slow overall growth and many other challenges are forcing more than 73% of the recently surveyed members of the National Association of Manufacturers (NAM, Washington, DC) to conclude that the U.S. is ''facing a manufacturing crisis.''


Chicago, IL - Skyrocketing health care costs, slow overall growth and many other challenges are forcing more than 73% of the recently surveyed members of the National Association of Manufacturers (NAM, Washington, DC) to conclude that the U.S. is ''facing a manufacturing crisis.'' NAM released the results of its annual membership survey on March 3 at National Manufacturing Week (NMW) 2003 at Chicago's McCormick Place.

Despite this grim economic perspective, NAM's leadership pledged to undertake a reinvigorated strategy for growth and renewal. ''Three-fourths of our members today believe that, 'In light of current economic conditions, the U.S. is facing a manufacturing crisis.' That's not just a problem for us. It's a problem for the nation, because manufacturing leads the economy in productivity and innovation,'' says Jerry Jasinowski, NAM's president. ''The root of the crisis is an environment in which our costs are rising steadily, but growth an export sales are stalled. It's time for Washington's policymakers to stop legislating cost increases that are pushing manufacturing jobs offshore.''

Nearly 64% of respondents reported health care costs rising 21% or more over the past two years, and amore than 72% expect increases of 11% or more this year. ''Health care costs are like a locomotive out of control. Health care costs for my company are up 17% this year,'' says Tony Raimondo, NAM board member and chairman and ceo of Behlen Manufacturing Co. (Columbus, NE).

Majorities of respondents to NAM's survey also attributed recent cost increases to government regulations and a culture of litigation.

Nearly 90% of respondents agreed it was ''important'' for the Bush Administration and Congree to enact by mid-2003 ''an economic growth plan that includes tax relief for consumers, investors and businesses.'' Two-thirds checked ''very important'' in response to this question on the survey.

In addition, about 80% of respondents predicted annualized gross domestic product (GDP) growth of no more than 2% in the first half of 2003, and only marginally better in the second half of this year. Plans for capital investment spending also mirrored this pessimism. Three-fourths expected overall growth to be below 5% for the year, and 85% expected the same growth rate for high-tech equipment specifically.

Likewise, viewpoints on the effects of conflict in Iraq were mixed. Respondents rated ''concern over war'' to be a major impediment to economic recovery, but a majority predicted a short economic impact, while 68% expected to economy to ''rebound quickly once hostilities subside.''

Following the loss of more then 2 million manufacturing jobs over the past two years, NAM adds that employment projects in its survey offered a ray of hope. More than three-fourths of respondents expect their payrolls to remain steady or increase in the first half of 2003, while less than 10% predicted layoffs on the second half.

The survey was distributed to a random sample of 2,000 of NAM's 14,000 members companies. Approximately 300 were completed and returned, generating a 15% response rate. Slightly less than 35% had fewer than 50 employees, while 43% had 50 to 250 employees, and 19% had more than 250 employees.

Control Engineering Daily News Desk
Jim Montague, news editor

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