16 August 2007 18:28 [Source: ICIS news]
The Manufacturers Alliance said in its quarterly economic outlook that the continuing decline in the
“In the face of continuing weakness in the housing sector, growth in the
The US Department of Commerce reported earlier on Thurday that US housing starts fell again in July, down 6% from June and fully 21% off from July 2006.
The alliance, whose 450 member companies are US-based manufacturers doing business worldwide, said it expects US gross domestic product (GDP) growth will slow to an inflation-adjusted rate of 1.9% this year.
That GDP forecast is below the 2.3% growth for 2007 that the alliance had forecast in its May outlook, and a 1.9% growth rate is well below the 2.5-3% trend growth rate that is seen as necessary for healthy economic development, according to economists at
The alliance said it expects GDP growth to return to 2.5% next year, but the trade group had earlier forecast 3% growth for the new year.
In particular, the alliance said it expects
The continuing decline in the
The alliance said the housing downturn also is infecting other economic sectors crucial to the chemicals industry, with growth in industrial equipment expenditures forecast to fall to a meagre 1.6% this year - to be followed by a 1.7% decline in 2008.
The transportation sector looks even worse, the alliance indicated, with that manufacturing segment forecast for a 10.6% decline this year.
On the plus side, the alliance said computer and electronics production - another chemicals consuming sector - should see a nearly 11% growth this year.
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