The expected slowdown in U.S. consumption of all kinds of products (homemade and imported) could deflate the U.S. dollar this year, according to UBS Securities in New York. The dollar has been averaging 91 on the Fed's index of 100 for the past 27 months. UBS analysts worry that China's continued resistance to re-evaluate the renminbi against the dollar could further weaken the dollar against such other currencies as the euro, pound sterling, Australian dollar, Canadian dollar and Swiss franc.

Jeff Fuhrer, director of economic research at the Boston Federal Reserve Bank, sees solid productivity growth continuing in 2006—as businesses expand investments in new technologies. Productivity rose by 2.6% last year. Fuhrer maintains that the slight dip in productivity growth in late 2005—will be temporary.

Automobile purchases will be postponed this year, suggests Erich Merkle, director of forecasting at automotive consultancy IRN in Grand Rapids, Mich., who sees sales slipping to 16.6 million units from 16.9 million in 2005. U.S. auto production will increase from the 11.6 million vehicles made last year, but it may be too early to gauge the level of assembly, he says.

Investment fund managers can't seem to agree how well the economy will perform this year. Most surveyed see consumer spending dropping because of large debt loads. They expect businesses will pick up some slack, though they don't agree by how much. Overall, their consensus forecast of 2.8 % economic growth is slightly more bearish than economists, who see 2006 expansion at 3.3%.

Imported Steel may be a boon to U.S. buyers soon. UBS Securities analyst Timna Tanners says the BRIC nations (Brazil, Russia, India and China) are boosting 2006 shipments into the U.S.—and could push imports back to the 3.0 million tons/month average of 2004 from the average 2.7 million tons in 2005. "High import levels in coming months can pressure steel prices lower, even with expected demand strength," Tanners says.

Buyers sourced $979 million worth of plastics equipment in the year 2004, the most recent data available from the Society of the Plastics Industry. The 9% increase reflects the purchasing of plastics injection molding, extrusion and blow molding machines.

Ucar Emulsion Systems has started production at its next-generation latex facility in Hahnville, La. The new UES facility owned by Dow Chemical and Union Carbide will replace existing latex manufacturing sites in Georgia and Texas, which are scheduled for shutdown later this year.

Purchasing of industrial controls and adjustable speed drives will be bolstered by assembly of industrial machinery and equipment spurred by rebuilding of Gulf Coast enterprises and expanded business investment nationwide. So says Brian Lego, director of economic analysis at the National Electrical Manufacturers Association, who also sees expanded sales to handle inventory restocking by distributors.

Manufacturers and Wall Street analysts agree that 2006 purchases of new diesel locomotives and freight cars in the North American Free Trade Agreement area should remain at robust 2005 levels. Market insiders say demand for new rolling stock is solid as the nation's railroads replace aging equipment, leasing companies add cars to meet increased rail traffic and shippers are buying their own freight cars to assure availability.

Steel Dynamics plans to invest about $40 million in its Jeffersonville, Ind., facility to expand its flat-rolled steel product line by adding pre-painted steel, acrylic-coated steel, and 55% aluminum-zinc alloy coated steel. Construction is expected to begin in April, with operations set to start in the second quarter of 2007. The Jeffersonville plant now specializes in galvanizing light-gauge steel.

Dura Automotive Systems of Rochester Hills, Mich., says more than half its operations will be affected by a restructuring in the next two years that will include shutting as many as 10 facilities and shifting production to lower-cost areas such as Mexico and Eastern Europe. The firm says it's not in danger of a bankruptcy like those initiated within the last year by other auto parts makers as Tower Automotive Collins & Aikman and Delphi.