The National Association of Manufacturers said Monday that it expects a strong recovery in manufacturing this year, with the sector outperforming the economy as a whole.
The organization, which unveiled its forecast at National Manufacturing Week in Chicago, said it expects manufacturing production to increase by more than 6 percent this year, with U.S. gross domestic product up 4.1 percent.
“We are more positive about the outlook for manufacturing and the general economy than we have been over the past two or three years,” NAM President Jerry Jasinowski told a press conference in Chicago’s McCormick Place.
He said a 6 percent rise in production would be the fastest pace since 1999.
In a survey of NAM members, responses were mixed, but generally positive. About 80 percent predicted GDP would gain at least 2 percent in 2004, with nearly a third expecting 3 percent or higher.
Companies planning to hire new workers outnumbered those expecting layoffs by a ratio of five to one. About 46 percent planned to hire either highly educated professionals or skilled workers.
About 89 percent of those polled cited health care, pension benefits and other non-wage compensation as posing a major roadblock to keeping manufacturing jobs in the United States.
The cost of complying with human resource regulations was second with 52 percent, while the cost of complying with environmental regulations was third with 43 percent.
Those polled said such high structural costs have hurt their companies’ profitability (84 percent), reduced or delayed their capital spending (50 percent) and reduced market share (46 percent).
Still, the weaker U.S. dollar has been a help. About 70 percent of those who responded said they exported, and half of them expect their sales abroad to increase this year over last.
When asked whether various subsidies by the Chinese government have had an impact of their business, 54 percent said they had.
According to the NAM, more than 431 of the 3,000 members chosen at random to receive the survey responded. The organization has a total of 14,000 members.
