1984 forecast: better times for US producers - and consumers
Nineteen hundred eighty-four will bring growing sales for an overwhelming majority of US industries, according to a new government study that should cheer both employees and shareholders.
''The outlook for 1984 is for growth on a broad front,'' Deputy Commerce Secretary Clarence J. Brown says. He spoke as the department issued preliminary details from its comprehensive annual report on the industrial outlook of the United States.
Of the 194 manufacturing industries for which the report makes forecasts, roughly 9 out of 10 are expected to post higher sales in 1984 than in '83. Only about 1 in 10 will record declines in their inflation-adjusted shipments, according to Commerce Department estimates.
The average consumer will face relatively pleasant economic conditions in 1984, if the department's forecasters are correct. For example, wages increases in 1984 are expected to outrun price hikes, but just barely. Wages are slated to rise 4.5 percent while inflation, as measured by a GNP-related index, will run at 4 percent. Food prices are likely to outpace the overall inflation rate, however, and increase at a 6.5 percent pace, the department says.
Credit-market conditions are forecast to remain largely unchanged. As a result, home mortgage rates are not expected to make any dramatic moves up or down.
The driving forces behind the economic recovery are expected to change somewhat in 1984. ''Residential construction and motor vehicles were the main drivers of the 1983 recovery,'' notes John E. Cremeans, research director for the Commerce Department's Bureau of Industrial Economics.
This year the 10 fastest growing industries will include some that did not turn around in 1983, including zinc, phosphate fertilizer, metal-cutting tools, steel, and semiconductors.
''Rapid growth is shifting from autos and housing to the primary industries and to some of the capital-goods industries as is the classic pattern of recovery,'' Mr. Cremeans notes.
There still are some dark spots in the industrial outlook. ''The expansion in 1984 will not be a universal blessing,'' Mr. Brown says. In fact, some 24 manufacturing industries will face declining shipments in 1984, the department estimates. These include shipbuilding, cigars and cigarettes, aircraft equipment , footwear, and copper.
Many of these industries have been on a long slide and peaked before 1975, according to Gurmukh S. Gill, who heads the department's industrial-analysis operation. ''These industries were losing ground before the last recession,'' he says.
Other industries remain troubled even though their sales are slated to rise somewhat in 1984. For example, firms that make machinery for farming, construction, textile manufacturing, and metal cutting face difficult competition abroad and are hurt by the dollar's high value. Despite what government forecasters see as a broad-based upturn, only one-third of the manufacturing firms tracked by Commerce will have gained back the ground they lost in the recession and surpassed the sales peaks they achieved between 1972 and 1981. The remaining two-thirds of the firms will spend 1984 recouping the ground they lost during the recession.
For example, truck and bus bodymakers, motor vehicle parts manufacturers, and steel and iron producers will enjoy growth in shipments of more than 10 percent in '84. Still they will end the year with sales 20 percent or more below the peaks achieved between 1972 and 1981.
A handful of industries were able to keep growing despite the recession. The Commerce Department categorizes eight such industries as ''growth leaders'' as a result of their ability to perform well in the recession, post growth of at least 6 percent this year, and continue steady growth for the rest of the 1980s.
The list is dominated, as it was last year, by high-technology industries including computers, computer software, electronic components, and medical equipment.
But some low-tech industries also made the growth leader list, including pulp and paperboard mills, sporting and athletic equipment, and greeting cards. In general, the industries that play the most important role in the continued recovery - including steel, automobiles, airlines, chemicals, food, construction , aerospace, and financial services - will post slower gains than the ''growth leaders.''
But these key industries have made significant progress since the recession's depths. As a recently as 1982, Cremeans notes, many of the key sectors - including steel, motor vehicles, airlines, and chemicals - would have been considered problem industries.
This progress should continue if the Commerce projections are correct. As Mr. Brown notes, most industries ''are likely to enjoy a higher level of prosperity in 1984.''