Posted December 19, 2001 Manufacturing News Nam Releases 2002 Economic Forecast The National Association of Manufacturers (Washington, D.C.; www.nam.org) anticipates sluggish recovery in 2002 from a recession that began in manufacturing more than a year ago because of declines in investment and exports. Following -2.7 percent GDP growth in the fourth quarter, the NAM predicts that the economy will grow by a modest 1.7 percent in the first quarter of next year, due to increased defense-oriented government spending and business inventory correction, followed by slightly stronger 2.4 percent growth in the second quarter, in response to 8 percent growth in government spending. Growth in the second half of 2002 will be 3.5 percent due to solid growth in consumer spending. "The good components of the economy are interest rates that have fallen four and three-quarter percentage points this year, declining energy prices and reduced inventories," Jerry Jasinowski, president of the NAM said. "The bad components are a dismal business climate, a credit crunch affecting a large segment of the business community and the loss of 1.3 million manufacturing jobs, the worst in the last 20 years. As for the ugly, exports are on pace to have their worst performance in more than 40 years and business investment has declined four quarters in a row, a grim trend we expect to continue for at least six months more," he said. "The economic stimulus is absolutely essential and repeal of the alternative minimum tax (AMT) is essential to the stimulus," said Jasinowski. "It makes little sense to provide tax relief to business when more and more businesses are being forced into the AMT. It hits them hardest when they can least afford it." The Manufacturing Report © Copyright 2001 by Lionheart Publishing, Inc. All rights reserved. E-mail Editorial Dept: tmr-editorial@lionhrtpub.com Lionheart Publishing, Inc. 2555 Cumberland Parkway, Suite 299, Atlanta, GA 30339 USA Phone: 770-431-0867 | Fax: 770-432-6969 E-mail: lpi@lionhrtpub.com