Manufacturing one bright spot for 2012 economy
A worker builds an engine for a 2012 Ford Focus on the assembly line at the Ford Motor Co.'s Michigan Assembly Plant December 14, 2011 in Wayne, Michigan. Manufacturing could be the main driver of economic growth in 2012.
Stacey Vanek Smith: Markets were up in Europe and Asia -- manufacturing is the word of the day.
Juli Niemann is an analyst with Smith, Moore and Company in St. Louis. She joins us live. Good morning, Juli.
Juli Niemann: Morning Stacey.
Smith: Juli, we're getting manufacturing data for December out a little later this morning, and that has been a bright spot in the U.S. economy recently. Will our factories help drive economic growth this year?
Niemann: This is the one thing that kept us out of the ditch last year. Manufacturing is moving up only because we have our export markets pretty decent. The emerging markets -- China, India -- they're all buying our stuff, and this is a real positive. And that's why we're showing positive growth in the United States even though things that used to drive the economy, housing construction, continues to be in the ditch and will be again this year.
Smith: We did get some manufacturing data out from Europe yesterday, and that fell a little bit, but the markets saw it as good news. Why is that?
Niemann: It was mildly positive. You know, they're still hanging on there. There is real concern that Europe is continuing to slide back into recession because of the huge debt problems that they have. Everybody is slowing down, and they're implementing austerity. Austerity is a genuine kicker into growth -- you simply cannot grow when you have austerity at this point. And that's what they're pulling the plug on.
Smith: We also got some manufacturing data out of China yesterday. That was strong, it showed some growth. Is that good for us, or is that bad for us?
Niemann: Well the key thing is, everybody who is growing... Nobody's really snatching food off anybody else's table. It helps all of us; you're not beggaring your neighbor. So when you have good economic activity there, that means they can buy more of our stuff. That will stimulate our trade as well.
So it's not a negative -- it's not a case of where we only have so much rotating around through the world. It's a positive for everybody. So when you see China beginning to pick up again, they will be buying more of our stuff and that will also help Europe. So it's a positive anywhere you see any kind of growth, it's going to help the global economy.
Smith: How important do you see manufacturing being for global economic growth this year?
Niemann: Right now, that's about the only thing you're going to see that's growing. Consumer demand is still in the ditch because people had so much debt, they're still paying down that debt. Job growth is very very sluggish -- in fact, it's going to stay a huge problem here in the United States.
So we can't count on the consumer. What we can count on are expansions, both in terms of government, of industry. That's where the big manufacturing is going to be coming from. Transportation. So it's going to be the big boys that moves us on ahead. This will not be something where the consumer leads us out of the problems.
Smith: Juli Niemann is analyst with Smith, Moore and Company in St. Louis. Thank you, Juli.
Niemann: You bet.