Businesses have become more confident in the last three months. The NAM/IndustryWeek Survey of Manufacturers, which was released last week, found that 88.7 percent of manufacturers are either “somewhat” or “very” positive about their business outlook. This represents an improvement in sentiment from the September and December surveys and is consistent with 4 percent growth in industrial production this year. It also corresponds with higher forecasts for sales, employment, exports and capital spending plans over the next 12 months.
Despite this more optimistic assessment, it is noteworthy that over 68 percent of the respondents are “somewhat” positive, reflecting a degree of caution moving forward. Indeed, manufacturers continue to follow the developments in Europe closely. They are also following tax and regulatory changes and the recent run-up in oil prices. Their top concerns are an unfavorable business climate and rising energy and raw material costs, with each cited by 60 percent or more of those taking the survey. Manufacturers are looking for more pro-growth policies from Washington.
Meanwhile, the Federal Reserve Board met to discuss the economy, with the Federal Open Market Committee opting to make no changes from its previous monetary policy initiatives. It will maintain its policy of “exceptionally low” interest rates through late 2014 and will continue to rebalance its portfolio toward longer-term – particularly mortgage-based – securities. The Fed noted improvements in the U.S. economy since its last meeting, with increased manufacturing activity helping to lift growth. The New York and Philadelphia Federal Reserve Banks echoed these findings in their regional surveys of manufacturers, and industrial production for the manufacturing sector rose for the third straight month in February (albeit with less gusto than in December and January). Small businesses are also more positive.
Energy costs, though, have begun to accelerate as the price of oil has risen. Both the consumer and producer price indices rose faster in February than in previous months, largely due to increased gasoline prices. At least for now, overall inflationary pressures remain modest, but as is often the case, consumer confidence edged slightly lower -- with energy prices being the main reason. Both consumers and manufacturers anticipate greater price increases in the months ahead – a perception that could dampen economic growth if it starts to impact spending decisions. So far, however, Americans have continued making purchases, with strong retail sales increases in February.
This week, most of the economic data will center on the still-depressed housing market. Housing starts – which approached 700,000 in January – are expected to show slight gains in February. If these figures come in as forecast, it will be good news for manufacturers and for the economy as a whole.
Chad Moutray
Chief Economist
National Association of Manufacturers
Chief Economist
National Association of Manufacturers
THE U.S.
CRUISES TOWARD A 2013 FISCAL CLIFF
As
tax cuts expire and spending falls, the economy will be hit with a 3.5% decline
in gross domestic demand.
Wall Street Journal
At some point, the spectacle America is now calling a presidential
campaign will turn away from comedy and start focusing on things that really
matter—such as the "fiscal cliff" our federal government is rapidly
approaching.
The what? A cliff is something from which you don't want to
fall. But as I'll explain shortly, a number of decisions to kick the budgetary
can down the road have conspired to place a remarkably large fiscal contraction
on the calendar for January 2013—unless Congress takes action to avoid it.
Well, that gives Congress plenty of time, right? Yes. But if
you're like me, the phrase "unless Congress takes action" sends a
chill down your spine—especially since the cliff came about because of
Congress's past inability to agree.
Remember the political donnybrook we had last month over
extending the Bush tax cuts, the two-point reduction in the payroll tax, and
long-term unemployment benefits? That debate was an echo of the even bigger
donnybrook our elected representatives had just two months earlier—and which
they "solved" at the last moment by kicking the can two months down
the road. And that one, you may recall, came about because they were unable to
reach agreement on these matters in December 2010. At that time, President
Obama and the Republicans kicked one can down the road 12 months (the payroll
tax) and another 24 months (the Bush tax cuts).
The result of all this can kicking is that Congress must
make all those decisions by January 2013—or defer them yet again. If the House
and Senate don't act in time, a list of things will happen that are anathema
either to Republicans or Democrats or both. The Bush tax cuts will expire. The
temporary payroll tax cut will end. Unemployment benefits will be severely
curtailed. And all on Jan. 1, 2013. Happy New Year!
There's more. As part of the deal ending the acrimonious
debate over raising the national debt ceiling last August, the president and
Congress created the bipartisan Joint Select Committee on Deficit Reduction,
commonly known as the "super committee." It was charged with finding
ways to trim at least $1.5 trillion from projected deficits over 10 years.
Mindful that the committee might not prove to be that super, Congress
stipulated that formulaic spending cuts of $1.2 trillion would kick in
automatically if the committee failed.
Sure enough, it failed. So those automatic cuts are headed
our way starting Jan. 15, 2013. To make this would-be sword of Damocles more
frightening, the formula Congress adopted aimed half the cuts straight at the
Pentagon.
Now, you don't really believe the defense budget will be cut
that much, do you? Probably the rest won't happen, either. But if it all did,
the resulting fiscal contraction—consisting of both tax increases and spending
cuts—would be in the neighborhood of 3.5% of gross domestic product, depending
on exactly how you count certain items, all at once. That's a big fiscal hit,
roughly as big as what a number of European countries are trying to do right
now, though with limited success and with notable collateral damage to their
economies. An abrupt fiscal contraction of 3.5% of GDP would be a disaster for
the United States, highly likely to stifle the recovery.
At this point, you are probably thinking: Well, of course
Congress will find ways to wriggle out of its self-imposed budgetary corset. I
agree. But the invisible hand won't do it; someone needs to figure out how.
It is next to certain that
nothing will be done about the fiscal cliff during the election season. In
fact, some Republicans are now threatening to renege on the spending cap for
fiscal year 2013 that they agreed to last summer. In the absence of progress
between now and Election Day, Congress will have about eight weeks
left—including Sundays, Thanksgiving, Christmas and New Year's Eve—to either
(a) find a solution to the long-running fiscal battle or (b) kick the can down
the road again.
Bet on (b). Also bet that the agreement will come just
before the bubbly flows on New Year's Eve. An outcome like that is far more
likely than falling off the fiscal cliff. But my point is that finding a clever
way to kick the can down the road again is becoming a bigger and bigger
challenge. And Congress has barely coped with previous such challenges.
Fast forward to December 2012. The lame duck Congress will
have on its plate all the issues it had to deal with in the December 2010,
August 2011, December 2011, and February 2012 budget battles, plus the
automatic cuts mandated by the failure of the super committee, plus the legacy
of whatever claims and promises are made during the campaign. We may also be bumping
up against the national debt ceiling again. And who will have to sort it all
out? A Congress whose days are numbered and whose complexion may have been
altered dramatically by the election.
The current betting odds say that President Obama will be
re-elected in November, with Republicans controlling both the House and the
Senate. Does anyone think a mix like that will be less contentious than the one
we have now? And does anyone think that Republicans, seeing control of both
houses of Congress on the horizon, will be more compromising in the lame duck
than they have been in the recent past?
In sum, while we probably will not fall off the fiscal cliff
in January 2013, there are ample opportunities for stumbles and slips between
now and then. So wouldn't it be nice if the two parties engaged on this issue
prior to Election Day?
Mr. Blinder, a professor of economics and public affairs
at Princeton University, is a former vice chairman of the Federal Reserve.
Note: “The result of all this can kicking is
that Congress must make all those decisions by January 2013—or defer them yet
again. If the House and Senate don't act in time, a list of things will happen
that are anathema either to Republicans or Democrats or both. The Bush tax cuts
will expire. The temporary payroll tax cut will end. Unemployment benefits will
be severely curtailed. And all on Jan. 1, 2013. Happy New Year! Fast
forward to December 2012. The lame duck Congress will have on its plate all the
issues it had to deal with in the December 2010, August 2011, December 2011,
and February 2012 budget battles, plus the automatic cuts mandated by the
failure of the super committee, plus the legacy of whatever claims and promises
are made during the campaign. We may also be bumping up against the national
debt ceiling again. And who will have to sort it all out? A Congress whose days
are numbered and whose complexion may have been altered dramatically by the
election.”
American Superconductor Corp. lost 84% of its value after
its largest customer, Chinese wind-energy giant Sinovel, started stealing,
rather than buying, its turbine-control software. Experts say that's par for
the course in China, where corporate espionage and other underhanded tactics
are simply part of doing business. "I used to be a Sinophile," said
AMSC chief executive officer Daniel McGahn. "I don’t know what I am now."
Bloomberg Businessweek
|
Quick Manufacturing News
As
its economy slows, China looks to Six Sigma and other quality efforts to
mitigate potential weaknesses. Click to continue
|
|
Quick Manufacturing News
By
creating a market for employees to evaluate and purchase individual health
insurance, these exchanges could once and for all take employers out of the
healthcare business. Click to continue
|
|
Quick Manufacturing News
Viewpoint:
It's clear that Americans value manufacturing jobs -- just not for their
kids. Click to continue
|
|
Quick Manufacturing News
In a
strongly worded speech, Gary Locke called for fairness in U.S.-Sino economic
ties, reiterating criticism of Beijing's exchange-rate policy, which
Washington says makes the value of the yuan currency artificially low. Click to continue
|
SEMINAR -- KEY UTAH EMPLOYMENT RULES
Ogden - Tuesday,
March 27, 2012
Salt Lake City - Thursday, March 29, 2012
Utah is generally perceived to be an employer-friendly
state. Thus, many businesses wrongly assume that there are no
state-specific laws governing their employment practices. Do not fall
victim to that incorrect assumption! Join the Council’s legal staff – Monica
Whalen, Summer Morgenstern, and Bob Coursey – as they address key
Utah rules, including:
- Rules to care about all the time, such as Utah’s Antidiscrimination Act, Municipal Nondiscrimination Ordinances, and Right to Work Law
- Rules to focus on at the beginning of the employment relationship, such as Utah’s Employee Reference Immunity Law, Poster Requirements, and Private Employer E-Verify Law
- Rules to focus on throughout the employment relationship, such as Utah’s Payment of Wage Act, Drug & Alcohol Testing Law, and Weapons in the Parking Lot Law
- Rules
to focus on near the end of the employment relationship, such as Utah’s
At-will Employment Rules and Final Paycheck Law
Attendees will receive a comprehensive manual covering these
Utah employment rules and more with easy-to-read summaries, links, and employer
tips.
Dates
and Locations
- Ogden - Tuesday, March 27th -- Comfort Suites -- 2250 S 1200 W, Ogden
- Salt Lake City - Thursday, March
29th -- Red Lion Hotel -- 161 W 600 S, SLC
Time
-- Seminar: 8:00 a.m. - 12:00 noon (registration &
breakfast buffet: 7:30 to 8:00 a.m.)
Cost
-- $129 per Council member; $209 per non-member (includes full
breakfast buffet and materials)
Call the
Council or reply to this email with registration information
or questions. You can download the registration form at http://ecutah.org/2012springutrules.pdf.
Full refund or credit will be given if cancellation is received one week
prior to meeting.
Certification: This program is approved for 3.5
general recertification hours toward PHR, SPHR, and GPHR recertification
through the Human Resource Certification Institute.
STATES TO MANUFACTURERS: WE WANT YOU ASAP!
EDCUtah -
EDCUtah -
In Utah, 21 manufacturers, ranging from food and medical
device makers to aerospace parts makers, have expanded or relocated to the
state in 2011. Utah's selling point: "Utah has the second youngest labor
force in the country," said Jeff Edwards, president of Utah's Economic
Development Corporation.
(CNNMoney)
(CNNMoney)
No comments:
Post a Comment