High-Tech Industries Fuel U.S. Economic Growth Strong Demand For Computers Sets Stage For Continued Prosperity
Vigorous demand for computers and other high-tech goods should keep the U.S. economy growing next year despite consumer fatigue and a deteriorating trade balance, the government predicted Friday.
In addition to computers, hot industries for 1998 also should include aerospace, dental equipment and management consulting, the Commerce Department said in a revival of an annual publication discontinued four years ago.
Businesses projected to shrink by the department’s “U.S. Industry & Trade Outlook ‘98” include shipbuilding, printing services, footwear and jewelry.
The report evaluates 350 business sectors - manufacturing and services. All major services and more than 80 percent of manufacturing industries are projected to grow through next year and beyond.
Overall, the department projected an inflation-adjusted growth rate in manufacturers’ shipments of 5.5 percent annually this year and next, up from 3.9 percent last year and 4.4 percent in 1995. A comparable aggregate figure wasn’t available for services.
Computer equipment is leading the way, with 29.6 percent growth projected annually this year and next.
“The importance of this industry to the economy cannot be overstated,” said Jonathan C. Menes, director of the department’s Office of Trade and Economic Analysis.
“If computers are excluded, the total of all manufacturing output … would be about 3 percent annually for 1997 and 1998 instead of the 5.5 percent growth,” he said.
With strong orders for commercial airliners, the aerospace industry is projected to increase shipments by 17.4 percent a year in 1997 and 1998. Dental equipment should increase 10.5 percent, a result of the aging of the Baby Boom generation, and radio and television equipment, 10 percent.
More traditional sectors of the economy are expected to show only modest growth compared with high-tech industries.
Motor vehicles and parts shipments should increase 1.8 percent in 1997 and 1998.
Some industries face not just slow growth, but contraction. Shipbuilding should fall 8.5 percent this year and next, a victim of reduced defense spending. Such printing services as typesetting, platemaking and production of color separations should decrease 6.5 percent as computerization transforms the industry.
Other declines are expected in industries suffering from competition from imports: handbags and purses, down 6.1 percent this year and next; footwear, down 2.1 percent; and jewelry, down 2 percent.
Among services, a range of computer-related services such as data processing all are projected to show better than 10 percent growth in receipts, as are professional services such as management consulting, public relations and accounting.
Growth in health care services, meanwhile, has tapered off from double-digit increases in the early 1990s. It’s projected to rise 5.6 percent this year and 5.9 percent in 1998.