|American Factories Race to Meet Demand|
|Subject||Economic Growth and Job Creation|
|Topic||Productivity and Growth|
|Key Words||Economic Growth, Job Creation, and Manufacturing Activity|
In some good economic news, the Institute of Supply Management reported a surge in new orders and a large jump in production across the board in most manufacturing industries. The data, based on a survey of purchasing managers, provides important evidence that a three-year slump in manufacturing may finally be ending. The institute's index indicated that manufacturing activity rose to the highest level since December of 1983; this was much higher than most economists expected.
An even bigger surprise was the indication that manufacturers appear ready to create jobs and hire workers after three long years of cutting factory payrolls. In commenting on the report, Norbert J. Ore, director of procurement at the Georgia-Pacific Corporation and chairman of the institute stated, "I think this speaks to the strength of the economy right now, but it also speaks to the confidence of companies."
Speaking at a fund-raising event in Dearborn, Michigan, President Bush echoed the findings and suggested that his strategy of lower taxes had helped revive the sagging economy. "Our economy was strong and it is getting stronger," Mr. Bush said. "Productivity is high; business investment is strong; housing construction is strong. The tax relief we passed is working."
The actual computation of the index, based on the answers given by purchasing executives, indicated that business activity increased from a reading of 57 in October to 62.8 in November. An index above 50 is considered to indicate expanding production activity, and an index below 50 indicates contraction in production activity. If production continues to increase at the November level, the institute predicts an overall annual economic growth of 7.3 percent.
Previous economic data had indicated that the job market had begun to
improve modestly in August and September, but most of that improvement
had been in the service industry. The new data by the institute provides
strong evidence that manufacturers were also finally ready to start hiring
(Updated February, 2004)
|Source||Edmund L. Andrews and Floyd Norris, "Manufacturing at Highest Level in Two Decades," The New York Times Online, December 2, 2003.|
Return to the Productivity and Growth
©1998-2004 South-Western. All Rights Reserved webmaster | DISCLAIMER