Week of November 11, 2002
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Analysts at IAMC Forum:
Manufacturing OutlookBy RON STARNER, Director of Publications, Site Selection and Conway Data, Inc.
Bright for U.S. Firms
SAVANNAH, Ga. The U.S. economy may still be slumping, but two analysts are predicting better times for industrial manufacturing companies in America.
Jeff Thredgold, president of Thredgold Economic Associates in Salt Lake City, told 175 attendees at the first-ever Industrial Asset Management Council (IAMC) Professional Forum on Oct. 27-30 that "the worst times are behind us" and that 2003 is shaping up as a very positive year for U.S.-based industrial firms.
"It may surprise you how well the industrial manufacturing sector will perform next year," Thredgold said at the Savannah, Ga., gathering of Norcross, Ga.-based IAMC (www.iamc.org). "The recession of last year was the result of an inventory imbalance, but that situation should be corrected soon."
One reason manufacturers should fare better in 2003 is the fact that they became leaner and more efficient in 2002. "Some 1.6 million industrial manufacturing jobs were trimmed in the last 24 months," said Thredgold. "But despite this drop, we are still not losing ground overall in terms of manufacturing's impact on our economy."
Manufacturing, construction and mining, Thredgold noted, accounted for 25 percent of the U.S. economy in 1960, 1970, 1980 and 1990 - and still accounts for 25 percent of the economy, despite the job cuts of the past two years.
"The only difference today is that it takes fewer American workers to do these jobs," he said. "As a result, productivity rose 4.6 percent in the last 12 months the strongest growth we have seen in 26 years."
Bruce: 'U.S. Still Least Expensive
"The U.S. is still the least expensive major industrial nation for manufacturing," said Bruce, who has conducted industrial site selections in several countries, including Mexico. "The bad news is that the U.S. has no national industrial policy, and that's not good."
Bruce said that manufacturers today must pay special attention to rising labor costs, taxes, transportation support networks and speed to market.
One pressing issue for many communities in America is a lack of available industrial land, noted Bruce. "Many cities are running out of land, utility capacity and other essentials for development."
Economic Recovery in 2003
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©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.