NAM predicts gradual manufacturing recovery

Manufacturing News, Source : TheManufacturer.com
Published : 02 Aug 2002 14:05

The economy grew at an annual rate of 1.1% during the second quarter, according to an advance report released Wednesday by the Department of Commerce. However, exports and investment managed to slightly offset the falling GDP during the second quarter.

Dave Huether, NAM’s chief economist, predicts that the manufacturing recovery will be a gradual one.

“Today’s report is a mix of the expected and the unexpected,” Huether said. “To no one’s surprise, inventor restocking, which was responsible for over half of the real GDP in the first quarter, slowed substantially. Also, consumer spending, which rose by only 1.9%, continued to decelerate from the brisk pace at the end of last year.”

Business investment showed marked improvement, with a 2.9% increase, and exports grew at a rate of 11.7%, the strongest showing in two years.

“Despite a dramatic slowdown from 5% growth in the first quarter, there is a silver lining in today’s report of lower than expected GDP growth in the second quarter,” Huether continued. “After a year and a half of decline, recoveries in investment and exports, both critical components of long-term growth, appear to be gaining steam. This is a positive signal that we can expect stronger growth for the second half of the year.”

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