Mindful of the effects of the 1991 recession that caused CIT Group's 1991-93 predictions for plastics shipments growth to be overstated by more than 50 percent, the Livington, N.J., economic research firm offers a clear caveat to its recently released ``Sixth Annual Plastics Outlook, 1997-1999.'' As reported on Page 1 of last week's issue, the company's projection for modest but steady plastics growth through next year, and greater growth in 1998 and 1999, prudently points out that all bets are off if there is a recession.
The absence of any volatility forecast in this year's report is its most notable feature and should provide the most comfort to the plastics industry.
Also reassuring is the projected rise in the U.S. trade surplus, which narrowed in 1995 to $419 million from 1994's $660 million - which was nearly double that of the previous year. The report estimates that the surplus will grow by 1999 to about $1.2 billion.
Notwithstanding a projected rise in resin prices, CIT's outlook for plastics processors is good. It could be better, but there is no obvious evidence to suggest it will be.
County acquires jobs and many questions
The approach taken by Lawrence County, Ill., in buying jobs by acquiring a major stake in an Indiana plastics company for $300,000 (see Page 5) and moving it to a local industrial park offers one approach to addressing a local economic problem. But it also raises some troubling conflict-of-interest questions.
The county is in the awkward position of issuing permits and enforcing laws involving a business it owns. That could affect the judgment of local officials, who might be tempted to look the other way in matters affecting the company's operation.
There is no suggestion that has happened. But it is reasonable to conclude that such a conflict could arise, given the interest the county has in protecting its investment of public money.
The executive director of the Lawrence County Industrial Development Council, Terry Denison, said the county put together a group of investors to buy the injection molding company to help counter the area's 11 percent unemployment rate. The county plans to sell its 40 percent interest in the firm and use the profit to purchase another manufacturing business for the community.
Denison acknowledges that the process might not work for other areas, but said, "It worked for us.''
It is easy to sympathize with the plight of Lawrence County, a rural community of 18,000 in southern Illinois that must compete with other hard-pressed communities to attract businesses. Virtually all offer handsome incentive packages to lure companies, with no guarantee the firms will remain after using up the incentives.
Lawrence County's experiment, of course, has considerable historical precedent. On a much larger scale, national governments long have practiced socialism by owning the means of production. Most now are selling off state-owned properties to private interests, however.
Hello? Lawrence County?