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BusinessWeek: January 11, 1993 |
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Editorials
A PROSPEROUS NEW YEAR IS UP TO BUSINESS It's all very well for economists to forecast better times, but unless something is stirring out in the real world of production lines and order books, nothing may happen. Well, this time it looks as if the real world is cooperating, which bodes well for a truly happier new year. With only a few exceptions, most of the industries covered by BUSINESS WEEK's Industry Outlook are seeing signs that 1993 will be a much better year than 1992 (page 56). Indeed, what's impressive is the breadth of the upsurge. Industries that did well in 1992 expect to do better. For example, U.S. chipmakers, whose share of the world market soared in 1992, are looking for an additional 20% increase in revenues in 1993. Chemical companies, whose aftertax profits jumped about 12% in 1992, expect a 13% jump this year. Even the industries hit hardest by the recession are feeling better about their prospects. Retailers are seeing rising sales. Homebuilders, especially the bigger ones, expect their first decent year since 1989. And two of the most woebegone sectors--steel and autos--are on the mend. Big steelmakers are expecting demand and prices to rise this year, enough to enable them to make money after losing a total of $2.5 billion over the past two years. U.S. carmakers, too, are looking to regain profitability this year as vehicle demand increases. With so many industries reporting growth, it's safe to assume the recovery will continue. Yet one essential ingredient is still missing: a healthy dose of business confidence--animal spirits, if you will--about the U.S. economy. Profits are up, but most businesses remain hesitant to hire and reluctant to spend on new equipment--except on computers. But that lean-and-mean mode that got companies through the recession could now become counterproductive. The economy is clearly recovering: It's now time for companies to take advantage of new opportunities, even if it means adding some workers or spending some money. That's the only way U.S. industry--and the U.S. economy--will prosper. | |
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