Q and A with Rita Needham

What is the status of the southwest Missouri manufacturing industry heading into 2004?

During the past three years of sluggish economy, the manufacturing sector has been the hardest hit. On the national level, there have been 2.7 million manufacturing jobs lost since July 2000, with Missouri accounting for almost 50,000 of those job losses. ... The economic recovery in the manufacturing industry is the slowest in 80 years.

Responding to the economic slowdown, manufacturers have downsized their work force, reduced inventories, restricted wage increases and eliminated unnecessary expenditures. They have also been busy looking for new niche markets, and investing in researching and developing new products.

On Dec. 11, 2003, the conference board announced a revised forecast in which they project that real gross domestic product growth will hit 5.7 percent (in 2004), making 2004 the best year economically in the last 20 years. In the report, conference board Chief Economist Gail Fosler said the U.S. economy will generate more than 1 million new jobs next year.

What is the jobs outlook for manufacturing locally?

A number of manufacturers in southwest Missouri have indicated that business is better in 2003 than the previous year. Others are just starting to see an increase in orders. While most area manufacturers are hesitant to say the U.S. economy has recovered, they express cautious optimism there are signs a recovery has begun. They'll feel more confident after experiencing several months of increased order activity.

As a result, most manufacturers are exhibiting caution when it comes to hiring workers. Instead of increasing the number of regular employees, they are choosing to follow the national trend and hire temporary workers because of the uncertainty of the economy. This meets immediate needs while allowing an opportunity to see if the increased pace in business will continue before adding employees to the company's wage and benefit program.

The Southwest Area Manufacturers Association has recently partnered with Penmac on a new program, SAMASelectHire, to provide members access to a variety of human resource products and services at discounted prices to enable them to more effectively hire, retain and develop qualified workers.

People know that business is cyclical, but is the business cycle changing? If so, in what way?

Today's manufacturers are faced with the challenges of a more complex and competitive atmosphere as a result of cheap overseas labor. That is creating a shift in the traditional business cycle for many manufacturers that affected by global sourcing initiatives, the trade imbalance and foreign competition.

What are the top three issues of concern to local manufacturers?

Stabilization and strengthening of the economy;

Cost of production (health care and insurance, regulations, legal fees, etc.); and

Foreign competition, global sourcing and trade imbalance.

What are the biggest challenges for the manufacturing industry?

Through its affiliation with the National Association of Manufacturers, SAMA is a participating member of the Coalition for the Future of Manufacturing, which is dedicated to raising awareness about the critical importance of a strong manufacturing base to American prosperity.

To ensure a vibrant manufacturing sector for future generations, America's policy makers must:

Reduce the cost of producing in the United States, including: containing health care costs; enacting legal reforms; ensuring adequate and affordable energy supplies; and reforming the regulatory process to more effectively assess costs and benefits and the impact on industry.

Level the international playing field by ensuring that foreign countries ... reduce trade barriers, comply with international trade rules and allow markets to determine exchange rates.

Promote innovation, investment and productivity through tax reforms that encourage investment and research and development; domestic and international tax rules that keep U.S. manufacturers competitive and promote inward investment; and strengthened government research and development programs.

Ensure an adequate supply of skilled workers through greater emphasis in our schools on technical education, including engineering and science; and strengthened implementation of the Workforce Investment Act and expanded business-government partnerships.