Realistic vs. wishful thinking.

Position:Straight Talk - Economic forecasts for the manufacturing sector - Industry Overview

About the time you are reading this (it was written before the holidays) economists will be proclaiming recession. Technically, that's defined as two consecutive quarters of economic contraction. To those in the manufacturing sector, the declaration of recession is nothing new. We've been slumping for more than a year.

The obituaries started about the time the third quarter economic numbers registered contraction. The Nov. 1 morning paper proclaimed: "The longest economic expansion in American history has ended." Economists were predicting: "The fourth quarter will show an even deeper drop than the third quarter." When the fourth quarter numbers are finalized later this month, it'll be official. What makes the news harder to swallow is that this is the only significant quarterly decline since early in 1991 when the last recession ended. The ten years of essentially uninterrupted growth pushed unemployment to 30-year lows, sent the stock market soaring, produced budget surpluses and created a generation of executives that never knew recession. Even the cyclically hardened executives got to thinking recessions were a thing of the past.

But as we move into a new year, hope springs eternal. Nobody I know doubts that the good times will roll again. And most feel it'll be sooner than later. After I read the obituary on the economy, I ran into a press release from the AMT--The Association for Manufacturing Technology. (See December T&P, Page 6.) Its headline: "Machine Tool Industry Positioned for Strong Turnaround by Mid-2002." It reported on the association's forecasting conference that "heard one speaker after another predict--some slightly more conservatively than others--that an economic turnaround would kick off during the first and second quarter of 2002, and then...

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