Manufacturers Optimistic on Economy, Survey Shows

U.S. manufacturing executives see only a one-in-four chance of a recession this year and by a wide margin expect profits and exports to be up over 1987 levels, an industry group said Wednesday.

The National Assn. of Manufacturers said a survey of 100 chief executives showed high levels of confidence about the economy and little concern about fallout from last October’s stock market plunge.

“The survey shows that manufacturers are more optimistic than economists,” said Jerry Jasinowski, the association’s executive vice president and chief economist.

‘No Material Change’

Jasinowski said that, as a result of the upbeat survey, he plans to increase the group’s forecast of gross national product growth in the first three months of 1988 from an anemic 0.6% to “between 1% and 2%.”

Questioned in the survey were 100 manufacturing executives who sit on the trade group’s board of directors. The survey was conducted on Feb. 5 during an annual meeting at Marco Island, Fla.

Some of the key findings:

- Eighty-one percent expected “no material change” in business as a result of the Oct. 19 stock market collapse.

- Seventy-eight percent said they anticipated that profits would be up from 1987 levels, with 19% expecting profits to be “substantially higher.”

- Another 78% said exports would rise in 1988 over last year, with 22% saying they would be “about the same.” None thought exports would fall.

At a time when many economists suggest that the next recession is approaching, manufacturers are more optimistic than they’ve been for years, Jasinowski said.

In fact, he suggested that to some degree the survey may be overly optimistic and “biased toward the present, rather than the future,” a reflection of the natural optimism of business executives.

Still, Jasinowski said the results were significant and a stark contrast to comments heard from manufacturers “from 1982 to 1986, when we didn’t get any positive feedback. It was all gloom and doom.”

The new optimism is directly traceable to the recent boom in U.S. exports, Jasinowski said. He attributed the export increases to the 50% decline in the value of the dollar over the last two years.