By Pete Julius

What does 2004 have in store for us? If we can continue to build on the momentum of the latter part of 2003, we should experience a prosperous 2004.  However, major backlashes resulting from the war in the Middle East, significant changes in import/export regulations, further devaluation of the dollar, rising interest rates or another massive terrorist attack could stifle our economy’s progress.  Much of the minimal progress that has occurred within our economy over the past couple of years has been attributed to consumer spending.  In order for 2004 to be a good year, businesses must increase their capital expenditures, take risks, and stop procrastinating.  In the January 12, 2004 issue of BusinessWeek, the economic indicators at the end of last year and the projections for 2004 seem to indicate that we will indeed have a good year.  

Within this issue is a 40-page spread looking at 2004.  In addition to the economic indicators, the special section also grades expected industry activity for 2004.  The grades were based on a number of different variables, including

  •  Projected sales growth
  • Consumer demand
  • Low prices
  • Capital spending
  • New technology
  • Necessity

Many other variables were used to grade each industry.  This report broke the industries into five categories: information technology, life sciences, manufacturing, services, and finance.  Each category had graded segments. The table below lays out the grades given for each segment.

AIT: semiconductors, telecommunications

Manufacturing: construction

BIT: software, hardware, services, consumer electronics

Manufacturing: energy, automotive

Services: media, advertising, professional services

Finance: banking, insurance

CLife Sciences: healthcare, pharmaceuticals

Manufacturing: defense & aerospace

Services: retail, transportation, travel

DManufacturing: heavy manufacturing

Services: education

Source: BusinessWeek

This special BusinessWeek report does not rank every industry segment, but provides us with a good idea of where our economy is likely to head this year.  It appears that services and light manufacturing-related industries will be the big winners in 2004.  Heavy manufacturing will continue to falter, due to more businesses shipping operations overseas to China.  On the topic of operations going overseas, it is important to note the increasingly popular trend of organizations outsourcing and/or moving service-oriented operations to other countries, such as India and the Philippines.  As we have preached to our clients in recent years, economic development organizations will need to focus on what industries need to stay in this country, what we do best, and what we can do that no one else can replicate.

Source: BusinessWeek, January 12, 2004, “ Outlook 2004: America’s Key Industries,” pages 88-127