Economic growth during 1997 hits a 9-yr high

Real GDP is estimated to have increased at a solid 4.3% annual rate during the October-December period of last year. This preliminary estimate from the Commerce Dept. was just the latest in a long string of better-than average reports on U.S.

03/01/1998


Real GDP is estimated to have increased at a solid 4.3% annual rate during the October-December period of last year. This preliminary estimate from the Commerce Dept. was just the latest in a long string of better-than average reports on U.S. economic growth. The most important contributors to economic growth in the fourth quarter of 1997 were consumer spending, exports, and business investment in product inventories.

In 1997, GDP increased by 3.8% -- the strongest growth in the U.S. economy since 1988. Export sales increased by 12.5% last year -- the biggest gain in 9 yr -- while business investment jumped by 12.2%, the largest increase in the past 13 yr. Inflation was tame, rising by just 2% -- the smallest increase since 1965.

However, business investment in new plants and equipment, which has been the driving force behind this long period of economic expansion, declined during the final three months of last year. Both components of total business investment -- spending for structures and for durable equipment -- recorded declines between the third and fourth quarters. During the fourth quarter of 1997, overall business investment (the sum of these two categories) fell at a 3.6% annualized rate, after growing by an average of 16.9% during the two prior quarters. Business spending for new equipment grew at a much stronger rate for the year as a whole -- 12.2% vs a 10.9% average for 1995-96 -- but it declined at a 3.9% annualized rate during the final three months of 1997.

The drop-off in business investment spending over the final months of 1997 should be seen as a warning flag, particularly for manufacturers and distributors. While it had been widely anticipated that capital spending would cool from the exceptional growth rates registered during the second and third quarters of last year, the absolute decline in spending during the final months of 1997 came as a surprise. The crisis in Asian currency and financial markets undoubtedly played a major role in this slowdown as American firms adopted a wait-and-see attitude about the implications of the crisis for their businesses. Performance in early 1998 will tell us whether this crisis is a blip on the economic weather screen, or a full-fledged tornado.





No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2016 Product of the Year; Diagnose bearing failures; Asset performance management; Testing dust collector performance measures
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me