Industry to Enjoy 7th Year of Rising Sales, U.S. Says
Industry should enjoy, at a slightly reduced pace, a seventh consecutive year of rising sales in 1989, according to the government’s annual assessment of winners and losers in American business.
The Commerce Department said that many manufacturing industries, particularly those producing electronics and other advanced technology and capital equipment, will do well in the new year as American producers continue to benefit from a boom in export sales.
“Overall, we expect another good year, the seventh straight of increasing output by both goods- and service-producing industries,” said Deputy Commerce Secretary Donna Tuttle.
The projections were made in the 556-page “U.S. Industrial Outlook,” which the government has compiled for 30 years. It provides a detailed analysis of 350 manufacturing and service firms.
Tuttle said that more than 70% of U.S. manufacturing industries were expected to enjoy rising sales in the new year, with the median growth rate, after adjusting for inflation, projected at 2.3%.
These projections are down slightly from the current year, when the government estimated that a decade-high 82% of manufacturing companies enjoyed higher sales with the median increase put at 2.4%.
Tuttle said that the slightly lower figures for 1989 reflected the belief that the non-farm economy, while not in danger of a recession, will not grow quite as rapidly as it did in 1988.
Overall growth will be held back by some slowdown in auto making, steel production and industries which provide goods for construction, which is projected to decline in the new year because of the effects of previous widespread overbuilding in the office and hotel sector.
The services sector of the economy has been experiencing the biggest growth in recent years. That was projected to continue in 1989.
Some of the service standouts will be in the fields of data processing, computer services and electronic data bases.
OUTLOOK FOR U.S. INDUSTRIES Manufacturing Forecast The Commerce Department predicts these industries will show the greatest expansion or decrease in 1989. Rates in percent.
Greatest Growth Greatest Decline Metal-cutting machines 13.9 Chemical preparations Semiconductor devices 13.4 Household cooking equip. Paper industry machines 13.0 Steel mill products Wines and brandy 10.5 Creamery butter Fertilizers 10.0 Fabricated structural metal Metal-forming machines 10.0 Mobile homes Surgical and medical 9.0 Building paper/board mill Optical devices/lenses 8.0 Non-ferrous foundries Instruments 7.0 Elec. housewares/fans Men’s footwear 7.0 Flat glass
Greatest Growth Metal-cutting machines -14.6 Semiconductor devices -7.9 Paper industry machines -6.9 Wines and brandy -6.6 Fertilizers -6.0 Metal-forming machines -5.5 Surgical and medical -5.5 Optical devices/lenses -5.2 Instruments -5.0 Men’s footwear -4.0
Service Forecast
Following are the rates of growth expected for selected service industries. Rates in percent.
Industry Change Space commercialization 50.0 Computer software 24.0 Electronic databases 20.0 Computer services 15.5 Prerecorded music 15.0 Operating/maint. (security) 15.0 Airlines 14.5 Data processing 13.0 Equipment leasing 12.0 Health services 10.7 Telephone/telegraph 8.0 Hotels and motels 8.0 Life insurance 8.0 Savings institutions 8.0
Source: Commerce Department’s 1989 U.S. Industrial Outlook
