1991 U.S. Industrial Outlook predicts major role for exports - includes directory of major trade events in 1991; J. Michael Farren's attitudes

Business America, Jan 14, 1991 by Jonathan C. Menes, Sally Carson

1991 U.S. Industrial Outlook Predicts Major Role for Exports

Exports of U.S. goods and services are expected to contribute strongly this year to promoting economic growth, according to the just-released 1991 U.S. Industrial Outlook, published annually by the U.S. Department of Commerce.

The Outlook predicts continued but slowing growth rates with average growth of about 1 percent in 1991 for the manufacturing industries covered in the Outlook. Sixty percent of these industries will have positive growth in 1991. Significant differences exist among various industries, however, as the Outlook's industry-by-industry reviews indicate. The striking double-digit growth rates predicted for many of the service industries show the continuing dynamism of these sectors.

The Outlook, a 560-page desk reference published annually since 1959, offers concise reviews and forecasts for more than 350 separate manufacturing and services industries. The 1991 edition covers about 75 percent of total shipments of manufactured goods.

More than 100 industry analysts, supported by staff economists and statisticians, prepare their analyses and predictions for the Outlook based on their in-depth knowledge of each industry and the latest data from the 1987 Economic Censuses and related statistics, the 1988 Annual Survey of Manufactures, and other government and private sector resources. The Outlook's data shows industry shipments, trade flows, trade patterns, and employment and earnings.

Analysis includes updates on federal and state legislative initiatives that affect industries. This year, for example, the Outlook describes in some detail how certain key industries will respond to environmental regulations. In addition, the Outlook covers emerging industries such as advanced materials, biotechnology, superconductors, microelectronics, and space commerce.

The Outlook is popular in the business sector among corporate marketing managers, banks, the investment community, advertising agencies, corporate strategists, corporate development officials, business economists, researchers, labor unions, chambers of commerce, and people writing business plans. Exporters will find this edition of the Outlook especially useful for planning export strategy.

New Trade Profiles

Most chapters profile each industry's international competitiveness--a new feature this year, accompanied by tables showing imports and exports and the trading patterns of major trading partners. A lead article discusses the world economic outlook.

The fastest growing manufacturing industries are dominated by high technology and health-related industries, including electronic components; computers and peripherals; aircraft, engines, and parts; and medical and dental equipment. As in most chapters, the Outlook reviews the status of each high technology or health-related industry, pinpoints market share, forecasts domestic shipments and exports for 1991, and indicates the long-term prospects for the following four years.

Among capital goods industries, machine tools, paper industries machinery, and oil and gas field machinery are expected to show above average growth. Normally, these industries are very cyclical and in a period of slow growth might be expected to decline. However, our analysts see a trend here toward continued investment by these industries to improve efficiency, increase international competitiveness, and meet new environmental standards. Continued expansion in exports will also fuel growth.

Two major industries--construction and motor vehicles--are expected to decline again this year due to short-term cyclical influences. These weak performances influence the economy broadly, affecting other industries such as steel, building materials, household durables, and wood products, for example.

The slowest growing segments of the economy represent a wide range of industries, and a variety of reasons for slower growth. Consumer-oriented industries are expected to do less well overall, reflecting the general slowdown in the economy. The Outlook review of the foods and beverages industry explains the factors behind the forecast that this industry will just keep pace with the overall economy. Butter shipments, on the other hand, as the Outlook explains, are declining rapidly because of changes in lifestyle. Shipments of household consumer durables--especially furniture and home appliances--are expected to decline, too. Many of these industries are affected by the drop in residential construction.

Services Perform Well Overseas

Service industries typically are less affected by the business cycle than manufacturing. Among key service industries expected to continue rapid expansion are information-related services--electronic information, data processing and networks, and computer professional and software services, for example. The Outlook describes how these industries make use of new electronic technologies to generate growing demand for innovative and cost-effective ways to create, store, and manipulate information.