Report Says Recession a Reality for Factories

After hovering around 18.5 million jobs for the last five years, the manufacturing sector has shed 837,000 jobs--or 4.5% of its work force--since July 2000, marking a full-blown recession for the nation’s factories, according to the National Assn. of Manufacturers’ annual Labor Day Report.

Though output and employment have fallen across virtually all manufacturing industries, the steepest drop has been in durable goods--big-ticket items such as appliances, machinery and vehicles. Output has plunged by 5.5% since last September after increasing by 11% during the previous 12 months. That dramatic reversal caused durable-goods employment to dive by 561,000 jobs, representing two-thirds of the total reduction in all factory jobs.

The NAM report blames several factors for helping exacerbate the slump, including a spike in energy prices, high interest rates in the early part of 2000 and a strong dollar that has crimped demand for exports.