Reported by Star-Bulletin staff & wire
Monday, April 2, 2001
Manufacturing activity falls for 8th straight month
NEW YORK >> Manufacturing activity declined for the eighth consecutive month in March, an industry group said today.However, the overall economy appears to be growing modestly, the National Association of Purchasing Management said.
In March, the NAPM's index of business activity rose to 43.1 from 41.9 in February. Any figure below 50 means a decline in manufacturing; the rise in the number to 43.1 means that the rate of decline slowed. An index above 50 signifies growth in manufacturing.
"This index is designed to show the momentum in the economy and the momentum is not getting worse," said Gary Thayer, chief economist at A.G. Edward & Sons. "It's still negative but the decline has slowed down, so to speak."
The purchasing management report is closely watched because it is one of the first indications of economic activity in March in the important manufacturing industry. The figures are based on a survey of purchasing executives who buy the raw materials for manufacturing at more than 350 industrial companies.
"The overall picture is one of continued decline in manufacturing activity during the month of March," said Norbert J. Ore, who oversees the monthly survey for the NAPM. "The manufacturing sector is in its eighth month of decline and appears to lack drivers sufficient to stimulate recovery."
A level of the NAPM index below 42.7 generally indicates a contraction in the overall economy, said Ore, adding that the average for the first three months of the year of 42.1 percent corresponds to a 0.2 percent decrease in gross domestic product.
Thayer said he was encouraged that the index had increased for a second month in a row after slumping to 41.2 in January, the lowest reading since March 1991. In order for the index to exceed 50, signaling growth, manufacturers will have to restrain production until consumers buy the goods that are sitting in inventory.
American Express says earnings will drop
NEW YORK >> American Express said today that its earnings for the first quarter and the year would be significantly lower than expected. It said first-quarter figures could be 39 cents a share, 18 percent below the 48 cents a share it earned a year ago. The firm blamed losses of about $185 million "from the write-down and sale of certain high-yield securities" held in the investment portfolio of subsidiary American Express Financial Advisors.
Tech demands drop, but still exceed worker supply
WASHINGTON >> U.S. companies expect 900,000 new information technology jobs this year -- 44 percent fewer than last year because of the slowing economy, an industry survey finds.Companies are being cautious in the uncertain economy, according to the study, released today by the Information Technology Association of America. Last year, the study found companies expected to create 1.6 million new jobs.
"Skilled technology workers -- still a highly desirable commodity to IT and non-IT companies -- are facing more cautious hiring practices than the 'irrational exuberance' that some say described 2000," said association president Harris N. Miller.
Yet of the 900,000 new jobs, 425,000 will go unfilled because of a lack of qualified applicants, the study said. "Demand still far exceeds supply in this market," Miller said. The association estimates 10.4 million people work in the field.
Technical support workers remain most in demand, expected to be a fourth of all new posts. And demand is up in enterprise systems and network design and administration.
Demand has dropped in technical writing, digital media and database development. Companies even are scaling back on Web development -- with demand to drop 25 percent, the study found.
The survey, based on interviews with hiring managers at 685 companies, was funded in part by Microsoft, Intel, Cisco Systems, ITT Educational Services and Knowledge Workers.
Swissair expected to announce huge losses
ZURICH, Switzerland >> After weeks of turbulence, the parent company of Swissair is expected to announce losses of $1.2 billion to $1.8 billion last year.Newspapers yesterday buzzed with speculation about the future of the SAirGroup and its stake in foreign airlines.
The SonntagsZeitung and SonntagsBlick papers reported that Mario Corti, former finance chief of Nestle and the new SAirGroup chief, would soften the blow by announcing a cash injection of at least $590 million from a banking consortium led by Credit Suisse.
Losses from stakes in Belgian and French airlines are largely to blame for Swissair problems.