Economy turning around
The Conference Board reports that the U.S. economy is moving in the direction of an economic recovery. The real Gross Domestic Product (GDP) is projected at 1.3 percent this year and will climb to 4.2 percent in 2003. The major forces in driving the recovery are a steady job market, strong consumer spending and improving business balance sheets. While growth is expected to be slow in the upcoming months, a major turnaround in profits is ahead. Rising productivity has become a strong growth factor in the United States and should lead to increasing profits, which have been under pressure.
Predictions from the Outdoor Power Equipment Institute (OPEI) still indicate that this recession will be a mild one and that the economy will show some improvement in the first part of this year. However, in terms of outdoor power equipment, the forecast is not as optimistic for the year 2002. Walk-behind mower shipments are expected to drop by 4.4 percent this year, but are estimated to rise 4.8 percent in 2003. All riding units (rear engine, front engine and garden tractors) are forecasted to decline by 6.6 percent, from 1,533,881 in 2001 to 1,433,340 in 2002. Although commercial riding mower shipments are expected to be down by 1.8 percent this year, they are calculated to rise by 7.1 percent to 120,762 in 2003. The shipments for front-engine lawn tractors are forecasted to drop to 1,146,950 this year, a change of 5.5 percent, but are expected to rise by 6.7 percent to 1,223,962 in 2003.
The Commerce Department has reported that overall housing starts rose 2.8 percent in February, indicating that the nation's housing market will almost certainly be a driving force to economic growth in the first quarter of 2002. The gain was due completely to the single-family division, which reached its fastest production rate in more than 20 years. Starts rose in three out of four regions in February. The West reported the largest gain with 14 percent, while the Midwest and South recorded gains of 0.8 percent and 0.9 percent, respectively. The Northeast was the only region that declined 9.3 percent following a large increase in January. The strong housing market and the ongoing economic recovery at the beginning of the year can be attributed to favorable weather conditions, continuing low mortgage rates, reviving consumer confidence and strong house price appreciation.
Sources: StraightTalk January 2002, Updating the U.S. Economy, The Conference Board, The Outdoor Power Equipment Institute, Inc., and the National Association of Home Builders (NAHB).
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