FOR RELEASE: January 7, 2002
|ISM Media Relations|
|480/752-6276 ext. 3015|
(Tempe, AZ) - As the nation, and world, continue to seek out bright spots in the economy and signs of recovery, leading economists discussed future economic conditions in the United States, Europe, Asia, and Latin America at the Institute for Supply Management's™ Fourth Annual Economic Summit in New York City. They predicted that economic recovery world-wide will begin later in 2002.
Economists supported the data reported in the ISM Semiannual Forecast, which stated that although U.S. expectations for the beginning of 2002 are less optimistic, economic growth will resume later in the year. The forecast further predicted that business revenues in both manufacturing and non-manufacturing will improve in 2002 when compared to 2001, with minimal inflation pressures. Also significant, in the ISM Forecast, is the expected decrease in capital expenditures. The overall net average change in capital expenditures forecast for 2002 in the manufacturing sector is a decrease of 14.4 percent. Non-manufacturing purchasing and supply executives are expecting a decrease by 3 percent.
As the economists discussed 2002 predictions for the U.S. economy, the focus automatically turned global. David Barker, European economist, for Moore Capital, stated it is common to hear global economists blaming slowdowns in other countries on events in the United States. In his presentation he stated "that while the recession in the U.S. contributed to problems in Europe, it is not the full story, as domestic final sales started slowing in Europe at the same time U.S. sales turned over." Barker concluded by stating "it seems likely that European growth will remain weak for a few more months and the forces that caused the slowdown (higher-than-expected inflation, financial imbalances for business, and inventory cut-backs) are unlikely to get any worse next year, although a spontaneous recovery is not expected."
Like Barker, Enrique Sanchez, senior vice president and director of country risk analysis, Bank of America, saw a correlation with the U.S. economy and Latin America's and Asia's, but didn't hold the U.S. completely responsible for their downturn. Sanchez reported uncertainty in both country's business spending cycles and noted the collapse in semiconductor demand in Asia and the collapse in industrial commodities in Latin America as key factors in the decline of those countries' economy. Although striving to make a recovery, Sanchez noted that political changes in Latin America will play a crucial role in recovery time.
A critical issue deemed rare by both Barker and Sanchez, was highlighted in David Meldrum's, chief economist, Air Products and Chemicals, Inc., presentation: the synchronized slowdown in industrialized countries. Not since the 1980s has the world seen industrialized countries in a synchronized slowdown. "This is very unusual and offers proof of how one economy can and does affect another," stated Meldrum. He agreed with the results of the ISM Semiannual Forecast, and also reported findings of "shallow growth in second half of 2002 in the U.S." He commented that "risks to the economy stay high given current politics" and that "consumer confidence is now the key to recovery."
ISM's Fifth Annual Economic Summit focusing on 2003 will be held on Tuesday, December 10, 2002 at the New York Marriott Marquis in New York City.
For more information on the ISM Fourth Annual Economic Summit and for a copy of the complete ISM Semiannual Forecast, please go to www.ism.ws, or contact Kristen Kioa at firstname.lastname@example.org, at 800/888-6276 or 480/752-6276, extension 3015.