Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, April 2, 1993 TAG: 9304020221
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
ANALYST SAYS IT'S A STEAK WITH NO SIZZLE
THE RECOVERY'S still trudging along, but Thursday's reports make it clear the momentum is s-l-o-w-i-n-g.
A pair of reports Thursday on building and manufacturing gave fresh evidence the economy has slowed from its rapid year-end acceleration.
The government said construction spending re- mained anemic in February and a business survey suggested that industrial activity slowed last month.
Samuel D. Kahan, an economist with Fuji Securities in Chicago, portrayed the national economic expansion as a "steak without any sizzle." But he also said there was no danger of its ending soon.
"The economy has turned the corner and has become self-feeding," Kahan said. He estimated it would continue to grow at between a 2 percent and 2.5 percent rate until midyear and then increase to about 3 percent.
Economist Sung Won Sohn, of the Norwest Corp. in Minneapolis, said the slower growth in the first quarter of this year has been "a welcome phenomenon, because the nation cannot afford a spending spree given the heavy debt burden on the part of consumers and businesses."
But, Sohn added, "the risk is that the slowdown could turn into a dip, which happened in 1990, 1991 and 1992."
The National Association of Purchasing Management said a survey of its members found the manufacturing economy continuing to grow in March, but at a slower pace than in January and February.
"I think we will continue to have growth; it's just going to be much more moderate growth," said Robert Bretz, chairman of the association's business survey committee and director of corporate purchasing at Pitney Bowes Inc.
The Commerce Department, meanwhile, reported that construction spending was up 0.1 percent in February after falling 0.5 percent a month earlier.
Outlays on residential, nonresidential and government projects totaled $438.4 billion at a seasonally adjusted annual rate, compared with $437.9 billion in January. The report revised January's decline to 0.5 percent from the 1.3 percent drop initially estimated last month.
Residential construction was off 0.2 percent in February after rising 1.4 percent in January.
Construction of single-family homes fell 0.4 percent, the first drop since June. But spending in the often-overbuilt apartment sector, which had declined for five straight months, rose 3.1 percent.
Nonresidential outlays advanced 1.8 percent and government spending was up 0.7 percent.
Analysts attributed the slowdown in single-family home construction in large part to winter weather.