Wild roller coaster rides tend to leave people unsteady on their feet, uncertain which way is up and unsure as to the precise location of their stomachs.
U.S. manufacturers know how they feel.
Manufacturers right now have been and continue to be on a fairly significant roller-coaster ride, Bill Diehl, head of BBK consultancy group, said at the Reuters Manufacturing and Transportation Summit in Chicago this week. Volumes went into the tank in 2009. They had nothing.
All of a sudden volumes have shot back up, he added. Now they have got capacity issues.
From the worst downturn since the 1930s, the U.S. economy appears to be slowly picking up. But while executives at the summit in Chicago this week were keen to talk about their growth prospects, they also acknowledged that the recovery is still on shaky ground.
Bill Phelan, president of PayNet, which collects data from more than 220 U.S. lenders, said that the cloudy economic outlook had U.S. businesses stuck in an era of uncertainty.
It's uncertainty in so many different levels. We are uncertain about our future government's finances, he said. We are uncertain about the EU's finances. We are uncertain about the impacts of this new healthcare plan, he said in reference to the Obama administration's healthcare reforms.
Phelan noted that the U.S. growth rate coming out of previous recessions was around 8 percent, significantly faster than the 5.6 percent growth recorded for the world's largest economy in the fourth quarter of last year and 3.2 percent in the first quarter of this year.
Whether it is concerns over the scale of U.S. and European sovereign debt, market volatility or the weakness of the U.S. consumer, executives said they are not counting on a full recovery nor hiring new workers until they are sure the economy is sound.
It can... be very tempting to add back a significant amount of workforce, thinking that the current improvement in production is going to last forever and it may not, said Ron DeFeo, Chief Executive of Terex Corp , which makes construction and quarrying equipment plus port cranes.
SIGNS OF IMPROVEMENT
There have been a number of encouraging signs in recent months that the U.S. economy is on the mend.
U.S. economic growth in the first quarter of this year was helped by consumers increasing spending at the fastest pace in three years.
Manufacturing in April also grew at a rate not seen for six years, while manufacturing added some 44,000 jobs. Since December, around 100,000 of the 2.2 million factory jobs that were lost during the recession have been added back.
U.S. auto sales, which were pounded in the downturn causing the government to bail out General Motors Co and Chrysler, rose 20 percent in April.
And the Association of American Railroads reported that for the first 18 weeks of 2010 ending May 8, U.S. railroads reported cumulative freight volumes up 5.8 percent from 2009, though they are still down 13.9 percent from 2008.
For all that, executives say they are concerned that the amount of debt countries from Greece to the United States have accumulated now poses a risk to sustainable recovery.
I think the major concern we have is not dealing with the debt levels in the major countries, DeFeo said. And if we don't deal with the debt and think we can push this off to future generations...we will step on the throat of future business expansion. It is a real limiter.
I think the recovery has legs in the short-term, he added. But the real question is, if we do not deal with the debt and some of the fundamentals in 2012 and 2013, I will have some concern.
Others said that volatility in the U.S. markets -- in particular the spectacular dive on May 6 for which no specific cause has yet been found -- had merely added to unease about whether the economy was sound.
I think anything that creates additional uncertainty in the environment is not helpful, said Bill Zollars, CEO of leading U.S. trucker YRC Worldwide Inc , which has been hit hard by the downturn. We're still, I think, a little bit skittish about what is going to happen.
So anything that continues to add to that uncertainty I think is not a remedy for a dramatic improvement in the economic recovery, he added.
Whether or not the recovery is real, executives said that it is going to be gradual and it will take a long time for U.S. employment levels to pick up.
I think if anybody thinks that is going to happen quickly, I don't subscribe to that theory. I think it is going to be a longer sustained process, said Chris Kearney, CEO of diversified manufacturer SPX Corp . And I think we could be looking really at a couple of years before employment levels in this country are where they were prior to recession.
(Reporting by Nick Carey; editing by Carol Bishopric)