Manufacturing Growth Predicted for 2003
The manufacturing and non-manufacturing sectors should grow 5.4 percent and 5.7 percent, respectively, the group said Tuesday. The optimistic outlook for manufacturing comes despite recent sluggishness in that sector.
"At present the sector continues to struggle as manufacturing is in its third consecutive month of decline," said Norbert Ore, chairman of the ISM manufacturing survey committee.
However, "manufacturing seemingly has sufficient momentum to avoid a major downturn," he said.
The group expects to see capital spending for manufacturers to grow by 4.6 percent in 2003 and capacity utilization to stand at 79.2 percent for the year.
The group's forecasters expect non-manufacturing capital spending to decline by 0.4 percent and non-manufacturing capacity utilization to stand at 83.9 percent in 2003.
On the employment front, the group expects to see manufacturing jobs decline by 0.6 percent in 2003 and non-manufacturing jobs to increase by 0.2 percent in 2003.
Among the top worries for both manufacturing and non-manufacturing businesses going into 2003 are continued weakness in the economy, pressures on labor and benefit costs and energy costs. Manufacturers also see terrorism, war and material shortages as threats to their businesses. Still, non-manufacturing businesses also note concern about inflation.
ISM forecasters expect the U.S. dollar to outperform all other major world currencies in 2003. Currencies expected to perform best versus the dollar include the euro, the Taiwan dollar and the British pound.