In an open letter introducing the National Association of Manufacturers’ 2009 Labor Day Report, NAM President John Engler warned that a nascent economic recovery could easily be reversed. Below is the text of the John Engler letter, “Policies will determine whether U.S. will experience recovery or reversal,” and the full report is available here.
Labor Day 2009 arrives just as the U.S. economy shows signs of reviving from the deepest, lengthiest and most painful economic downturn since the Great Depression.
With this report, the National Association of Manufacturers (NAM) documents the harsh conditions that have plagued the U.S. and global economies during this financial crisis and recession. Consumer spending, business investment, housing and exports have dropped more than in any time since WWII. Unemployment has soared.
We naturally focus on the downturn’s impact on the manufacturing sector, which has lost nearly two million jobs since the recession began in December 2007. Industrial production has plummeted 16.4 percent during the same period.
Still, the NAM’s 2009 Report is a forward-looking document, one that identifies many reasons why Americans can expect the economy to grow in 2010 and beyond. Whether it’s improvements in the housing market, rising activity in European countries, or new orders for capital goods, indications are that a recovery may be in the early stages.
Most strikingly, the analysis by the NAM’s chief economist, David Huether, finds that over 40 percent of the manufacturing jobs lost during the recession may be regained. There is legitimate concern about the possibility of a “jobless recovery,” but the projections estimate a return of 913,000 manufacturing jobs by 2014 – bringing total manufacturing employment back up to 12.7 million.
So there are grounds for optimism, but even greater grounds for caution – caution by officials at the local, state and especially the federal level. A recovery could stall out or even shift into reverse if Congress and the Administration enact policies that discourage investment, hamper flexibility, or raise the costs of doing business in the United States. Prospects for good jobs, a strong manufacturing sector and a growing economy depend on U.S. global competitiveness. (continue reading…)