Economic Brinkmanship
Nov 07
The mess in the mortgage industry is partially responsible for consumers' jitters and, despite price declines, housing sales are continuing to slide. And let's not forget rising gasoline prices, which rob consumers of discretionary income. Then again, analysts say Americans have continued to spend, with personal expenditures continuing to climb all throughout last summer. Are you keeping this all straight?
This economic instability is unnerving business executives as well as consumers. Only 63 percent of large and 76 percent of small manufacturing companies responding to a National Association of Manufacturers (NAM) third-quarter survey had a positive business outlook, representing the lowest level of optimism in roughly four years. Nonetheless, survey results indicate that both small and large manufacturers expect pricing to remain stable and sales to increase, albeit moderately, over the next 12 months. Both groups also expect to continue to increase capital expenditures, although there will be a significant slowdown. Large manufacturers' capital expenditures are projected to rise by only 0.3 percent, while smaller manufacturers' capital expenditures are expected to increase 1.6 percent. Both groups of survey respondents also expect to add jobs over the next 12 months, with employment increases at large companies being more modest (0.4 percent) than at smaller firms (1.6 percent).
Concerned about eroding confidence brought about by weakness in the housing market, surging oil prices, etc., on October 31 the Federal Reserve Bank cut its rate a quarter of a point to 4.5 percent in order to help keep the economy on track. However, it left the question of further rate cuts open, saying "recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation." So what will happen when the Fed meets again on December 11 is anyone's guess.
How can executives continue to plan in such an uncertain environment? Experts warn that being too cautious can actually kill growth, i.e., doomsayers can fall victim to a self-fulfilling prophecy. Thus, optimists should forge ahead. And those with new facility and expansion plans would be wise to keep on hand our 2008 Annual Directory. It contains basic data on the states and the names of some 3,500+ economic development contacts, with web and e-mail addresses of sponsoring organizations. It may help your company to navigate what lies beyond the current economic brink.
Project Announcements
Canfor Expands Fulton, Alabama, Production Operations
04/22/2024
Tucker Door & Trim Plans Henrico County, Virginia, Operations
04/19/2024
Zekelman Industries Expands Blytheville, Arkansas, Operations
04/19/2024
Fibrebond Corporation Expands Webster Parish, Louisiana, Operations
04/19/2024
Master Steel Expands Hardeeville, South Carolina, Operations
04/19/2024
L3Harris Technologies Expands Orange County, Virginia, Operations
04/18/2024
Most Read
-
2023's Leading Metro Locations: Hotspots of Economic Growth
Q4 2023
-
2023 Top States for Doing Business Meet the Needs of Site Selectors
Q3 2023
-
38th Annual Corporate Survey: Are Unrealized Predictions of an Economic Slump Leading Small to Mid-Size Companies to Put Off Expansion Plans?
Q1 2024
-
Manufacturing Momentum Is Building
Q1 2024
-
Making Hybrid More Human in 2024
Q1 2024
-
20th Annual Consultants Survey: Clients Prioritize Access to Skilled Labor, Responsive State & Local Government
Q1 2024
-
Public-Private Partnerships Incentivize Industrial Development
Q1 2024