Weak industries reviving?
Manufacturing, high-tech, and airlines show hints of brighter skies ahead.
Three sectors of the economy that have been hit hardest since 2001 - manufacturing, airlines, and high technology - are showing some signs of fresh life.
• Manufacturing firms such as Taylor Machine Works in Louisville, Miss., feel glimmerings of better times ahead. Company president Lex Taylor says orders for forklifts made by his firm are up 18 percent from a year ago, for example.
• The Nasdaq stock index, laden with high-tech firms - is up 22 percent so far this year, roughly twice as much as broader-based stock indexes. Chipmaking giant Intel recently forecast an modest uptick in revenues, which could mean that computermakers see busier times ahead.
• Even in the beleaguered airline industry, some carriers are reporting rising revenues and fuller jets.
That's the good news. The challenge in each of these industries is that the improvement doesn't necessarily mean new hiring. For these key industries, and for America as a whole, modest economic growth feels to many like a prolonged recession.
"The economy has not experienced such a prolonged period of job loss since the [1930s] depression," reckons Dean Baker, an economist at the Center for Economic and Policy Research.
The implications extend beyond labor force to the political landscape. According to a new Christian Science Monitor/TIPP poll, about two-thirds of Americans hold President Bush at least partly responsible for the weak job market. They are closely divided over whether Mr. Bush's policies will restore growth.
The economy could certainly use a boost. Manufacturing lost 53,000 jobs in May, the Bureau of Labor Statistics reports. That's the industry's 34th consecutive month of job losses.
But as firms such as Taylor Machine Works get ready to shift up, they are sometimes looking for new workers. Mr. Taylor has been bringing back a few workers laid off earlier - a boon for where the 850-worker firm is one of the biggest employers.
The NAM figures the economy will pick up speed in the second half, reviving the manufacturing business. A weaker dollar, tax cuts, and an easy monetary policy are seen as helpful.
Manufacturing is a particularly important as bellwether for the economy at large. It represents bedrock activity that ripples out to create service-sector growth. "Every dollar of specific manufacturing production creates ... 76 cents in products and services from nonmanufacturing sectors," Jerry Jasinowski, president of the National Association of Manufacturers, said in releasing a report last week.
Airlines suffering from shrunken traffic since the Sept. 11, 2001, terrorist blow, the Iraq war, and the SARS scare - see hope in "a slight increase" in bookings for summer. "As we put these things behind us ... we expect to see traffic improve," says an expert at the Air Transport Association. "But the industry is not out of the woods."
Revenue passenger miles were down 6.9 percent in April from the same month of 2002. The industry lost $11.3 billion last year, and anticipates a further $6 billion to $8 billion loss this year - unless traffic really bounces up. Individual airlines, such as Continental and American, have reported modest improvements in revenue and traffic in May.
High-tech is also slow to rebound. "People are taking a long time to find jobs," says Michaela Platzer, research vice president for the American Electronics Association in Washington. The latest government statistics show a loss of 560,000 high-tech jobs since January 2001. The sector has only about 5 million jobs in all, employed in fields from office equipment to software and computer services.
One market research firm, IDC, expects worldwide tech spending to grow this year by 2.3 percent, the first up year since 2000. Digital music, digital cameras, wireless networking, and broadband communications are among the tech areas that see some momentum in sales.
The signs of progress come as a welcome change. Since February 2001, just before the latest recession began, the total US job losses reached nearly 2.5 million. That's the worst loss since 2.6 million jobs were cut between June 1981 and November 1982, another recessionary time.
The hard knocks are teaching some firms new tricks - which could slow a rebound in hiring. An upturn may not help many of one-third of workers who have been laid off since 2000 at Wainwright Industries Inc. in St. Louis, for example. That's because the firm has been further automating production of its metal components for cars and aircraft. "We do more with less," says Don Wainwright, the firm's chairman.
"It's a struggle just to break even," says Mr. Wainwright, who expects a sales pickup in the final four months of the year.