Assembly Lines: Economic Recovery in 2003
February 1, 2003
The U.S. economy may still be slumping, but two analysts are predicting better times for manufacturing companies in the United States. These are some manufacturing predictions that IAMC Professional Forum attendees heard from speaker Jeff Thredgold.
- The U.S. will not enter into a double-dip recession. Instead, the economy will recover in 2003, but economic growth will be only half the rate of a normal recovery.
- The federal government will experience budget deficits for the next 3 to 4 years as the slow growth continues. However, the budget should return to annual surpluses by the end of the decade.
- The six most critical industries of the next decade will be technology, transportation, telecommunications, financial services, entertainment and biomedicine. "The United States is still the leader in all of these sectors," says Thredgold.
- The current U.S. unemployment rate of 5.6 percent should rise to 6 percent by the end of 2003.
- The current U.S. inflation rate of 1.5 percent is not expected to rise and won’t be a problem for the economy for a long time. The reason being is that there is 33 percent in excess capacity for every major industry in the world. That creates competition that keeps prices for durable goods low.
- Short-term interest rates will not increase any time soon.
- Canada is doing very well right now, but Mexico is performing better and should continue to improve.
- The excess supply of commercial real estate throughout the country will continue to make the office sector a poor performer.