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As we send this issue of IMM to the printer, America’s leaders, along with many experts and economists within and around the U.S. government and large financial institutions, are using the R word: Recession. The U.S. economy, they say, has entered, is entering, or may slip into recession during the first half of 2008, and could recover in the second half of the year or some other time.
The may-slip-into opinion is from Ben Bernanke, chairman of the U.S. Federal Reserve, a position many view as the strong hand on the tiller of the national economy. That hand seems a bit shaky in these uncharted murky seas.
Many factors are in play. The housing market has flopped, taking residential construction with it. Only one automaker, Honda, showed a sales increase in February—0.7%. Banzai?
The subprime mortgage debacle has undermined or hobbled many big financial houses, and perhaps the country’s overall financial infrastructure. Financing anything has therefore become tougher. Loan givers lack liquidity and confidence.
Crude oil has blown through the $100/bbl level. Gasoline and diesel prices in the most car-dependent country on the planet are on the rise. Need we mention the price of plastic resins, or other energy-type products?
Biased as I am in favor of plastic, it is hardly as basic a need as food. Prices of many staples around the world are rocketing upward. There have been street riots over those prices. Among those catching the blame are the makers of ethanol. So far, I’ve heard no one saying cereal-based polymers are stealing breakfast from babies. So far.
Daunting as those problems are, the front pages recently have given more space to reports of U.S. job loss and lengthening unemployment lines. A report by Rebecca M. Blank, a visiting fellow in economic studies at the Brookings Institution, says almost 20% of all unemployed persons have been out of work for six months or longer. Entering the last two recessions that number was around 12%. Blank calculates that a full 9% of the labor force is now in trouble.
Other reports reveal that as many as two-thirds of the jobs lost came from the manufacturing sector, which is us. Let’s get serious: Jobs don’t just get lost. They cease to exist when there isn’t work.
Shift to the upside: There are people doing something about this.
For one, the American Mold Builders Assn. (AMBA) is speaking out loudly about the lack of attention to the decline in U.S. manufacturing and its effect on the overall economy. Collaborating with the American Manufacturing Trade Action Coalition (AMTAC), AMBA wants U.S. political leaders to focus attention on strengthening the manufacturing sector.
More of us should be doing more of that. As I write, there are three candidates running for president. If you’ve heard any of them address how critical manufacturing is to the economy, raise your hand. My fingers remain on the keyboard.
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| Rob Neilley, Editor Injection Molding Magazine rneilley@IMMnet.com |
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