The U.S. manufacturing economy should pick up somewhat in the second half of 2005, after weathering a slowdown in the first part of the year brought on by declining business investment and rising imports from Asia, according to the National Association of Manufacturers.
Washington-based NAM, at a May 17 news conference, predicted that manufacturing will grow about 4 percent in the second half of the year, up from the 2.5 percent in the first half.
NAM argued that several factors will boost growth: Energy prices and inflation will moderate, business investment will pick up as corporations are ``awash'' in cash and corporate profit will increase 10 percent.
Other reports have suggested softness, with the Federal Reserve reporting May 17 that industrial production fell in April. And NAM predicts that manufacturers will add only about 100,000 jobs for the year, to total 14.3 million.
Jerry Jasinowski, president of the Manufacturing Institute, the research arm of NAM, predicts that manufacturing's ``soft patch'' will dissipate as business investment rises sharply to nearly 14 percent in the second half.
Jasinowski said NAM believes export growth will exceed import growth in the second half, for the first time in several years, mainly because of a weaker dollar and an improved trading picture with non-Asian countries.
NAM said the picture with Asia, which makes up 42 percent of U.S. trade, will not improve markedly. Recent reports have suggested that China is moving toward loosening its currency peg, a key lobbying priority for NAM, but Jasinowski declined to predict what affect that could have for manufacturers.
``I think what impact that has is pretty hard to quantify,'' he said.