Strong Factory Upturn Seen for ’04

The National Assn. of Manufacturers said Monday that it expected a strong recovery in manufacturing this year, with the sector outperforming the economy as a whole.

The trade organization expects manufacturing production to increase by more than 6% this year, compared with a projected 4.1% increase in the U.S. gross domestic product.

“We are more positive about the outlook for manufacturing and the general economy than we have been over the past two or three years,” association President Jerry Jasinowski said.

He said a 6% rise in production would be the most since 1999.

In a survey of association members, responses were mixed, but generally positive.

Companies that were planning to hire new workers outnumbered those expecting layoffs by a ratio of 5 to 1. About 46% planned to hire either highly educated professionals or skilled workers.

About 89% of those polled cited healthcare, pension benefits and other non-wage compensation as posing a major roadblock to keeping manufacturing jobs in the United States.

The cost of complying with human resource regulations was second with 52%, while the cost of complying with environmental regulations was third with 43%.

Those polled said such high structural costs have hurt their companies’ profitability (84%), reduced or delayed their capital spending (50%) and reduced market share (46%).

However, the weaker U.S. dollar has been a help.

About 70% of those who responded said they exported, and half of them expected their sales abroad to rise this year over last.

When asked whether various subsidies by the Chinese government have had an effect on their business, 54% said they had.