Federal Reserve Chairman Alan Greenspan has talked about an uptick in the economy, but mold maker Don Metz delivered a contrary message to a congressional hearing April 24: For his industry, there's no sign of recovery.
Metz, vice president of Metz Tool and Die Works Inc. in Rockford, Ill., testified at a hearing of the House Committee on Small Business examining the impact of interest rate hikes on small manufacturers. The debate, however, quickly broadened to include a litany of problems that small manufacturers said they faced, from the strong dollar to the credit crunch to the U.S. government's steel tariffs.
``You have heard testimony that our economy is rebounding,'' said Metz, whose small, family-owned, injection mold-making shop has seen its sales drop 30 percent in the past two years. ``Our industry has not made it back yet.''
Metz, who was representing the National Tooling & Machining Association in Fort Washington, Md., said the newest threat to toolmakers is overseas competition, particularly as customers move manufacturing offshore.
While he did not present specific figures from the mold-making industry, he talked of touring other mold shops in his area and seeing machines idled and work spaces empty because employees have been laid off. He said one shop has instituted a ``No-Work Friday'' policy because it only has business enough to open four days a week.
But Metz acknowledged after the hearing that it is hard to know how much difficulty to attribute to foreign competition and how much to a downturn in the economy.
The hearing included testimony from Federal Reserve Vice Chairman Roger Ferguson, who echoed Greenspan's comments about an economic recovery.
Ferguson said increases in U.S. industrial output and orders are preliminary: ``These developments are encouraging signs, but they are no guarantee that a sustained, solid expansion of final demand has gained traction.''
He told the committee that the Fed will take a ``renewed interest'' in machine-tool-industry economic data, although he did not endorse using it. Small Business Committee Chairman Don Manzullo, R.-Ill., had urged the central bank in a March 27 letter to give that data more consideration in interest-rate decisions.
Several speakers and members of Congress said at the hearing that the central bank probably will not raise interest rates in the short-term. So speakers took the opportunity to press for other pro-business items.
Metz said Congress should let small manufacturers pool their health-care coverage nationwide in ``association health plans,'' and he touted the Skilled Workforce Enhancement Act, which would give $15,000 tax credits for training workers.