Smart Business Magazine, Oct 2012

12 Smart Business Florida October 2012 BY PETE FEHRENBACH p f e h r e n b a c h @ s b n o n l i n e c o m W hile the U S manufacturing sector has been resurgent for three years and counting the recovery cooled a bit in the third quarter and theres no clear consensus among experts as to the reasons why The reasons for this leveling off are varied and complicated Many experts have lists of theories to explain the slowdown but theres a lot less consensus among these authorities theories than you might expect There is one commonality however among the experts opinions They remain guardedly optimistic that the rebound will continue but at a slower pace Were definitely seeing a little bit of a blip in our multiyear recovery over the last couple of months says Chad Moutray chief economist for the National Association of Manufacturers Whats causing that blip is uncertainty uncertainty caused partly by the fiscal cliff everyone has been talking about partly by the economic problems in Europe and a few other factors We havent solved these problems yet and it doesnt look like were going to be solving them anytime soon so thats a headwind that we expect is going to be persistent over the next few months and probably longer What happens domestically over the next few months will be hugely important for U S manufacturers over the next year or two That includes next months election how steep the so called fiscal cliff dropoff turns out to be at the beginning of 2013 and then the subsequent direction of the U S economy thereafter The biggest unknown out there right now for the U S economy is the fiscal cliff and the fact that on Jan 1 assuming that Congress doesnt act between now and then were going to see tax increases and spending cuts of around 500 billion to 600 billion Moutray says That obviously could have some dire consequences for the economy Weve had the Congressional Budget Office and a lot of others saying we could have a recession early next year if thats the case Were seeing a lot of people in Washington angling to see if they can try to avert that But theres an enormous amount of pessimism that thats going to happen So thats a key thing manufacturers are worried about the uncertainty over what their tax rates are going to be and what the regulatory environment will be like next year People are very engaged in whats happening in the U S election because it obviously will impact manufacturers deeply Special Report Manufacturing STAYING POWER The manufacturing surge has slowed but some resilient trends keep pushing it forward