The National Association of Manufacturers finally sees a light at the end of the tunnel, predicting job growth during a strong rebound period for the manufacturing industry.
Its Outlook for Manufacturing and the U.S. Economy predicts that the nation's GDP will increase by 4 % during 2004, nearly matching the robust 4.3% of last year. Things will be far brighter for manufacturing, which should grow 6% over last year. "That's the fastest pace since 1999. It's the first time in the last three years that factory growth is faster than the general economy," according to NAM president Jerry Jasinowski. He notes that production increased by only 2.7% in 2003.
The annual survey of NAM's 14,000 members shows solid growth, with 31% expecting to increase their employment this year. The majority, 63%, predict little change in employment. Respondents expect a minimum of layoffs, with only 6% predicting that their employment level will decrease this year. Manufacturing companies lost about 3 million jobs in the past few years. "About half of those will come back during the course of the recovery," Jasinowski says.
Among the driving factors behind this growth are the President's tax cut, the improved exchange rate and increased federal spending. "Another key factor is that we probably have the lowest inventory levels in recent times," Jasinowski says. Capital spending will increase by double digit rates, he predicts.
The weak dollar is helping to boost exports for many companies. A full 70% of the respondents export goods, and half of them expect exports to increase this year.
The group is concerned about outsourcing and is preparing a major study on this trend. Jasinowski explains that U.S. firms produced about $2 trillion worth of good last year, "an awfully big number." Much of that is produced for consumption in regions near the off-shore plant, he says. Only about 10% returns to the U.S. to compete with American-made products.