It would make sense then that over the past few years, many experts have claimed that the United States is in the midst of an economic recession in manufacturing. The forum’s other keynote speaker, Dr. Robert Fry, a former senior economist at DuPont, told leaders within in the composites industry that he does not see it that way.
“Over the last couple years, ‘flat’ would be the way characterize industrial production in US manufacturing,” said Fry. “I don’t think it’s fair to characterize that flat line as a recession.”
Instead, Fry believes manufacturing is experiencing “slow, long-term growth.” He added that many economists have mischaracterized the state of industrial manufacturing for a number of reasons. One big reason he believes a lot of people mistakenly use total industrial production as a proxy of manufacturing. By doing so, economists are also evaluating the performance of mining and utilities markets.
“Mining production has dropped very sharply because of the decline in oil and gas production after global gas prices collapsed, so that held down total industrial production quite a bit,” said Fry.
Fry also touched on one of the bigger stories of the past few years: the decline in oil prices. He believes that low oil prices are good in the long term because when oil prices are low, industrial production grows rapidly, which will lead better growth over the next few years.
He adds, however, that politics will play a big role in growth as well. Out of President Trump’s proposed policy plans, he believes deregulation, including a repeal of Obamacare, a reworking of Dodd-Frank, and lowering of corporate tax rates are good. Fry is wary, however, of indications that a Trump administration will increase tariffs and back away from trade deals. He’s also concerned by Trump’s promises of mass deportations, which would lead to an enormous decrease in GDP.
“I’m relatively optimistic about growth going forward,” said Fry. “What kind of growth we get depends on what mix of President Trump’s policies we’re going to get. There are some good ones that would help a lot. There are some bad ones that would hurt. Let’s hope that we get the good ones and economists fight him on the bad ones.”
