Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 29, 1993 TAG: 9312290249
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The Commerce Department, in its 35th annual forecast of winners and losers in American industry, said prospects were bright for makers of automobiles, computers, factory machinery and home appliances.
Prospects were at least mildly positive for almost every industry except the defense sector. Of 136 manufacturing industries surveyed, 121 were expected to show increasing sales.
"We anticipate the fastest expansion in manufacturers' shipments since 1988," said Jeffrey Garten, undersecretary for international trade.
Overall, the department's U.S. Industrial Outlook projected an inflation-adjusted median growth rate in manufacturers' shipments of 2.8 percent, meaning half would see faster growth and half slower.
That compares with gains of 2 percent this year and 1.7 percent in 1992 and a decline of 3.7 percent in 1991, the year the recession ended. If realized, the predicted 1994 advance would be the third consecutive gain and the largest in six years.
Low interest rates are fueling demand by businesses for computers and machinery and by consumers for automobiles and homes. That, in turn, is stoking a revival across a wide spectrum of related industries.
Sales of cars and light trucks should total 14.8 million in 1994, up 6 percent from this year, and construction of new homes, 1.3 million, up 4 percent.
The projected advances in the two fastest-growing industries - metal-cutting machinery, 12.8 percent, and electronic components, 11.1 percent - are both benefiting from strong auto sales.
Furniture and appliance sales, both predicted to rise 4 percent, are linked to the strengthening housing market.
Other fast-growing industries are connected to computerization, health care and environmental improvements.
Despite the prospect for higher shipments, 60 of the 121 manufacturing industries projecting growth are expected to cut employment.
They are achieving higher output by modernizing and computerizing their production. Payrolls in the fast-growing electronic component manufacturing business, for instance, are expected to shrink 2 percent.
Seven of the 10 industries anticipated to be most sluggish are linked to defense. They include aircraft parts and engines, with a 24.3 percent drop predicted, search and navigational equipment, and ship building.
Among services, the fastest-growing should be space commerce, which includes commercial space launches and satellite communications. The department predicted a 22.6 percent increase in revenues.
Other services with strong revenue gains expected are data processing, 15.5 percent; electronic information, 14.7 percent; and general merchandise retailers, 14.3 percent.
The health-care industry, which eventually could be reined in by President Clinton's reform proposal, is expected to grow 12.5 percent to $1.06 trillion, topping $1 trillion for the first time.
The two slowest-growing services were financial. The department anticipated a 6.8 percent decline in activity at venture capital firms and a 5.1 percent drop in mortgage lending at savings institutions, with the slack being picked up by other lenders.
\ Other highlights of the 1994 forecast\
The 1990s will usher in a vast array of interactive information and entertainment services.
Cable television's revenue should increase 10 percent in its first full year of reregulation. It is the fastest-growing advertising medium.
Newspaper receipts should show a slight inflation-adjusted pickup of less than 1 percent next year after declining for six years in a row.
Consumer enthusiasm for pickup trucks, vans and sport utility vehicles is siphoning sales from passenger cars.
U.S. production of crude oil should fall 3 percent.
Generic drug production is expected to soar, with patents on one-third of the industry's best-selling brand-name drugs expiring by the year 2000.
Banks should report profits for the third consecutive year.
More than 30 percent of high school graduates and 60 percent of college graduates use computers in their jobs. However, only 25 percent of high school teachers are computer literate.
Box office receipts at movie theaters are expected to hit a record $5.2 billion.
The number of lawyers has tripled to nearly 800,000 over the past 20 years.
by CNB