InterviewUS economy and manufacturing to recover in 2010 - ISM

04 March 2010 19:45  [Source: ICIS news]

By Joseph Chang

SAN ANTONIO, Texas (ICIS news)--The US economy is headed for a continued recovery in 2010 as the business cycle turns up, a senior Institute for Supply Management (ISM) official said on Thursday.

“Barring exogenous factors, we see a continuing economic recovery through the year. The business cycle is turning up, profits are rising and there is strong global demand with China and India driving commodity prices,” said Norbert Ore, chair of the manufacturing business survey committee for the ISM.

Ore spoke at the ISM Chemical Group meeting in San Antonio, Texas.

A number of ISM indicators point to a sustainable recovery for the US economy, he noted.

The widely-watched US manufacturing PMI (purchasing managers index) for February came in on Monday at 56.5, showing the seventh straight month of growth.

For the ISM indexes, anything above 50 indicates expansion, while under 50 indicates contraction on a sequential monthly basis.

“The chart looks like a V-shaped recovery to me, and there’s not much of a chance we’ll revert from that,” said Ore.

Ore also cited strength in the manufacturing new orders index – what he called “the lifeblood of manufacturing”, which hit 59.5 for February.

The non-manufacturing index (NMI), an indicator for the service sector, also turned positive on Wednesday at 53.0.

Ore said the consumer is a key component to any vibrant recovery in the second half of 2010.

“If the consumer opens his wallet in Q3, we’ll see a stronger second half. If he doesn’t, growth will moderate,” he said.

While coming off a very low bottom, the current US economic recovery is not atypical from past rebounds, noted Ore.

“When we went into the downturn, I assumed this would not be a normal recovery. But what we’re finding out is that it actually looks pretty similar,” he said.

To discuss issues facing the chemical industry go to ICIS connect

By: Joseph Chang
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly