The US National Association of Manufacturers (NAM) has released its annual Labor Day Report on the State of the American Worker.
‘The current economic picture is a decidedly mixed bag for workers, businesses and the economy as a whole,’ says Jerry Jasinowski, President of the Association.
‘The good news is that more than three fourths of manufacturers do not foresee a double dip recession, expecting growth to continue through the second half of the year. While our survey shows a lull in economic activity in July and August, manufacturing orders for September and October are picking up, which is a promising sign that the recovery remains on track. We expect to see moderate GDP growth of 2.6% for the remainder of this year.
‘The good news is that the negative factors driving the economy into recession have worked their way through the system,’ Jasinowski said.
‘Interest rates are at historic lows, energy costs have come down from previous highs, excess inventories have been worked off and the dollar appears to be moving toward market equilibrium with other currencies. Also, the fundamentals of strong consumer economic activity are in place with both productivity and incomes are rising. Thus, we believe a gradual upturn in manufacturing employment will emerge next year.
‘While steady, the recovery remains sluggish,’ Jasinowski said, ‘and the rate of growth is much weaker than in recoveries from previous recessions. No sector of the economy is showing a significant pickup in demand relative to capacity and we see no significant rebound in employment this year. Our survey shows that 80% of manufacturers expect their capital spending to remain flat or actually decline through the remainder of this year.
‘Manufacturing is the heart of the nation’s economy and capital spending is the pulse,’ Jasinowski said.
‘Unfortunately, many business leaders lack the confidence to undertake capital investment and spending, and many who have confidence are unable to obtain routine credit from banks,’ he concluded.