Here's a article that bodes well for computers in 98. Article is from the LA times biz section.
Saturday, November 22, 1997
Computers to Lead Growth, Forecast Says
Economy: High tech, aerospace and consulting will be hot
industries through 1998, Commerce Department report on 350 U.S.
business sectors predicts.
From Associated Press
PREV [W] ASHINGTON--Vigorous demand for computers and other
STORY high-tech goods should keep the U.S. economy growing
next year despite consumer fatigue and a deteriorating
NEXT trade balance, the government forecast Friday.
STORY In addition to computers, hot industries for 1998 are
likely to 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 in the department's
"U.S. Industry & Trade Outlook '98" include shipbuilding,
printing services, footwear and jewelry.
The report evaluates 350 business sectors--both in
manufacturing and services. All major services and more
than 80% of manufacturing industries are projected to grow
through next year and beyond.
Overall, the department forecast an
inflation-adjusted growth rate in manufacturers' shipments
of 5.5% annually this year and next, up from 3.9% last
year and 4.4% in 1995. A comparable aggregate figure
wasn't available for services.
Computer equipment is leading the way, with 29.6%
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% annually for
1997 and 1998 instead of the 5.5% growth," he said.
The Commerce Department issued annual industrial
outlook reports from 1959 through 1994, before suspending
publication because of budget cuts. It hired McGraw-Hill
Cos. to prepare much of this year's report.
With strong orders for commercial airliners, the
aerospace industry is projected to increase shipments by
17.4% a year in 1997 and 1998. Dental equipment should
increase 10.5%, a result of the aging of the baby boom
generation, and radio and television equipment is expected
to rise 10%.
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% in 1997 and 1998. The slower growth of the
driving-age population is cutting into sales, but the
average cost per vehicle is rising as older drivers opt
for luxury vehicles, especially larger sport-utility
vehicles.
Housing starts are slowing, so growth in consumer
durable goods--from rugs to washing machines--should
average only 1.3% this year and next.
Some industries face not only slow growth but also
contraction. Shipbuilding should fall 8.5% 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% as computerization
transforms the industry.
Other declines are expected in industries suffering
from competition from imports: handbags and purses, down
6.1% this year and next; footwear, down 2.1%; and jewelry,
down 2%.
Among services, a range of computer-related services
such as data processing are all projected to show better
than 10% growth in receipts, as are professional services
such as management consulting, public relations and
accounting.
Travel spending should show a healthy gain of 7.9%
this year and next, a reflection that many households have
purchased the big-ticket goods they want during the nearly
seven years of economic expansion and are spending
disposable income on vacations.
Growth in health-care services, meanwhile, has
tapered off from double-digit increases in the early
1990s. This sector is projected to rise 5.6% this year and
5.9% in 1998. Still, U.S. health spending, forecast at
$1.16 trillion next year, remains 13.5% of total economic
output, the highest of any industrialized nation.
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