Short-term manufacturing gains part of bright forecast
Feb 18, 2004 12:00 PM
The Federal Reserve Board reported strong gains in the manufacturing sector yesterday as activity in U.S. factories, mines and utilities rose 0.8% in January. The increase in utilities activity was sparked by cold winter weather.
Utility output showed the strongest gains with a 5.2% overall increase and a 7% increase in natural gas. Factory output, which accounts for four-fifths of total production, rose 0.3%, marking its fifth consecutive monthly increase.
A large chunk of the trucking industry’s customer base serves manufacturing clients. The report may alleviate concerns that manufacturing is in a state of decline, despite 2.8-million factory jobs having been lost since January 2001.
Industry analyst Chris Brady, who has made long-term projections of manufacturing growth, believes the outsourcing of jobs is a necessary part of building a leaner, meaner industry.
“The manufacturing industry— like any other industry— is always in a state of restructuring. Major events will lead to major restructuring,” Brady said, citing China’s recent rise as an industrial power. “I think manufacturing will continue to grow because of it.”
Brady points out there was a 59.4% increase in output from 1990 to 2000 even as employment decreased by 432,000 jobs in the same period. Brady has been disappointed with media focus on loss of jobs instead of gains in the industry, pointing also to the 45.3% rise in productivity in that decade.
“If you believe in the media, we’ll be producing nothing in five years,” Brady said.
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