Manufacturers expect more cost-cutting, survey finds

CHICAGO - U.S. manufacturers expect to have to resort to more cost-cutting to deal with a slow economic recovery from recession, according to an industry survey released Monday.<br> <br> Seventy percent of the more than 300 companies polled by the National Association of Manufacturers said they plan to preserve profits by aggressively cutting costs.<br> <br> The manufacturers expect the U.S. economy to grow a modest 2 percent to 3 percent this year, and four out of ten predict continued recession within their own industrial sectors, according to the trade association.<br> <br> Results of the annual survey, released in Chicago at North America&#39;s largest manufacturing trade show, called National Manufacturing Week, reflected only slightly more upbeat sentiments than a year ago when the nation&#39;s economy was mired in recession. In the 2001 poll, the consensus opinion of the manufacturing executives was that the economy would grow 2 percent or less for the year.<br> <br> Jerry Jasinowski, president of the manufacturers association, saw results as &#34;confirming that manufacturing&#39;s emergence from prolonged recession will be slower than the rest of the economy.&#34;<br> <br> About 55 percent of the manufacturers reported a negative impact from the strong dollar on export sales. Fifty-seven percent said their health care costs had risen by 20 percent or more over the past two years with two-thirds expecting a further double-digit increase this year, adding to profit pressures.<br> <br> &#34;Cutting costs continues to be the preferred way of increasing profit margins,&#34; Jasinowski said. &#34;Unfortunately, most manufacturers are already so lean and mean that further economies will go well into the bone: reducing health care coverage, 401(k) matching programs, even considering moving production abroad.&#34; <br>