More positive signs for manufacturing growth in the U.S.
Over half of manufacturers forecast growth next year
Dave Hannon -- Purchasing, 11/3/2009 2:55:43 PM
WHAT DO YOU THINK?
There are more signs emerging almost daily the show that the U.S. manufacturing sector will rebound in 2010.
The latest statistics from the U.S. Commerce Department show orders for durable goods increased 1.4% in September after a 2.7% drop the previous month. Bookings for non-durable goods, including food, petroleum and chemicals, rose 0.6%. "Much of this is related to a need to stabilize inventories after savage liquidation in the first half of the year," Joshua Shapiro, chief U.S. economist at MFR Inc. in New York wrote in a note to clients. "Today's reported gain for September puts things back on track after the disappointing results recorded in the preceding two months."
And the increased orders have manufacturers more optimistic. The latest Manufacturing Barometer Survey from PricewaterhouseCoopers showed a clear optimism among manufacturers polled in the third quarter. According the survey, only 23% of industrial manufacturers feel the U.S. economy declined in the third quarter (down from last quarter's 63%) while 13% believed the U.S. economy actually grew.
More than half (57%) of manufacturers are forecasting positive growth in the next year, with 12% forecasting double-digit growth, while 45% expect single-digit growth. A full 68% expect their business to recover by the end of 2010 - with 23% predicting it will happen in the first half of the year and 45% in the second half of the year.
The survey of manufacturers also found that costs and prices remained lower in the third quarter, with 43% reporting lower costs. On the pricing side, only 17% raised prices, compared to the 27% that lowered them.
Even employment trends are picking up in manufacturing. "Manufacturers are now back in a hiring mood. Yes, rub those eyes," said Bernard Baumohl, chief global economist for the Economic Outlook Group in Princeton, N.J. tells Dow Jones Newswires.
Durable goods orders go up
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