US manufacturers sense recession but see upturn

28 January 2008 16:54  [Source: ICIS news]

WASHINGTON (ICIS news)--The US may already be in a recession but American exports, fuelled in part by a weak dollar, will grow steadily this year and help sustain the economy until a recovery begins in 2009, a manufacturing group said on Monday.

 

In its quarterly economic forecast, The Manufacturers Alliance said, however, that “mounting concerns over the US economic outlook along with evidence of slowing in other key countries suggest that 2008 will be a volatile and uncertain year for the global economy”.

 

“Recent housing, manufacturing and job growth data… indicate that the US economy may have lapsed into a recession,” the alliance said. 

 

Along with the US economic downturn, “the continued crisis in global credit markets, record high oil prices and emerging global inflation all loom as risks to the world economy”, the manufacturing trade group said.

 

The group’s economic outlook is given weight by analysts because the 450 member firms of the alliance are US-based and international manufacturers that do business globally.

 

Despite that dour overall outlook for the US and global economies, the alliance said that “exports may, however, provide a bit of good news for the US”.

 

“During 2008, the positive impact of dollar depreciation is expected to partially offset the negative impact of slower growth,” the forecast said. 

 

The alliance said it projects “a rise in the annual growth of total US goods and services exports from 7.7% during 2007 to 8.7% during 2008 and to 9.2% in 2009”.

 

Growth in industrialised countries other than the US is expected to slow from an annualised rate of 2.4% in the fourth quarter of 2007 to 2.2% in the first quarter this year and to 1.9% for all of 2008, the alliance said.

 

However, the manufacturing group said it expects growth in non-US industrialised nations will be revived by an improvement in the US economic outlook later this year to accelerate to 2% growth in the first half of 2009 and then to 2.2% in the second half of next year.

 

Among developing nations, including China, India and Mexico, the alliance expects economic growth to slow from an estimated 5.4% in 2007 and the first half of this year to 5.3% in the second half of 2008, followed by a decline to 5% growth for 2009.

 

By: Joe Kamalick
+1 713 525 2653

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