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Posts tagged ‘National Association of Manufacturers’

Obama Likely to Miss Goal of Doubling Exports.


WASHINGTON — Back in January 2010, President Barack Obama set a lofty goal of doubling U.S. exports in five years. With just 18 months to go to 2015, that target seems to be slipping beyond reach and has vanished from White House talking points.

Blame tepid U.S. manufacturing growth, the lingering weak global economy, and a stronger U.S. dollar, which makes it harder to sell American goods and services overseas.

Monthly export numbers have been mostly stagnant this year. And only a scant 6,000 manufacturing jobs were added last month, according to Labor Department jobs statistics released Friday.

“The goal of doubling exports keeps getting harder to achieve, not easier,” said Alan Tonelson, research fellow at the U.S. Business and Industry Council, which represents about 2,000 mostly family owned manufacturing companies. “We’re actually backsliding, not making progress.”

Obama and administration officials counter by asserting that 7.2 million jobs — 500,000 of them in manufacturing — have been added since job losses bottomed in March 2010, two months after Obama set his doubling-exports goal.

“Over the past four years, for the first time since the 1990s, the number of manufacturing jobs hasn’t gone down. It’s gone up. Now we have to build on that progress,” Obama said this week in Chattanooga, Tenn., after similar stops in Illinois, Missouri and Florida the week before.

Actually, the number of overall manufacturing jobs has changed little over the past 12 months.

Those 500,000 “new” manufacturing jobs have been cited before by Obama, going back to his acceptance speech at the Democratic National Convention last September. The lack of a significant progress since then underscores how hard it will be to reach his goal of doubling U.S. exports by the end of next year.

Obama’s boasts of job gains also ignores the millions of jobs, including hundreds of thousands manufacturing ones, that were lost in the early months of his presidency and in the final year that George W. Bush was president. Obama cherry-picked his starting point, making it the 2010 employment trough.

He is proposing lowering the corporate tax from 35 percent to 28 percent. As a special incentive for manufacturers, he would set a rate of 25 percent for companies “that bring jobs back to America.” In exchange, he wants to pair changes in tax laws with new domestic spending.

Republicans balked at those strings attached.

The worst recession since the Depression began in December 2007 and officially ended in June 2009, although the unemployment rate continued to rise for six more months. It hit 10 percent in late 2009 before a slow descent to 7.4 percent last month.

“We applaud the president’s discussion about manufacturing. I think the president never misses a chance to talk about the importance of manufacturing,” said Chad Moutray, chief economist at the National Association of Manufacturers. He also praised the administration’s efforts to push two new free-trade pact negotiations, one with Europe and the other with Asian trading partners.

But, Moutray added, “We’ve had really disappointing numbers so far this year. Hopefully, they’ll start to turn around as we move into the second half. … Next year, it’s going to be almost impossible for us to meet the president’s goal of doubling exports.”

A new industry report on the level of manufacturing activity showed an expansion in July. But the improvement likely won’t move the needle much toward Obama’s export target.

“The more products we make and sell to other countries, the more jobs we support right here in America,” Obama said on Jan. 27, 2010, in his State of the Union address. “So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support 2 million jobs in America.”

For all of 2009, U.S. exports totaled $1.6 trillion. Doubling that would suggest reaching a level of $3.2 trillion exports for all of 2014.

U.S. exports did rise to $2.2 trillion in 2012. But then came slowdowns in Europe, China and Brazil.

In May, the most recent trade figures available, monthly U.S. exports slipped 0.3 percent, to $187.1 billion. New trade numbers are out next week.

White House officials agree trend lines don’t look good. But they emphasize big-picture improvements.

“You can look at the export slowdown in one or two ways. You can say, ‘Well, job growth hasn’t been as good in the last 12 months.’ But what I would say is that we haven’t created 500,000 (manufacturing) jobs like this since the ’90s,” said White House economic adviser Gene Sperling, using that familiar job-creation number.

“I feel like the wind is at our backs. Like a lot of things in life, good things happen when you seize opportunity, when you have a trend going your way and you seize and expand on it,” Sperling said.

Treasury Secretary Jack Lew suggests economics is “kind of collective psychology. When people feel better about the future, they act better and the economy picks up. When people worry, it also has an effect on the economy.”

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Source: NEWSmax.com

Boehner: Scandals, Government ‘Arrogance’ Hurt Economy.


Image: Boehner: Scandals, Government 'Arrogance' Hurt Economy

By Lisa Barron

House Speaker John Boehner says the trio of controversies surrounding the Obama administration is indicative of an “arrogance” of power that is hurting the economy.

“In America, the people have always had a healthy skepticism about their government. But lately, they’ve had more reason than usual to be skeptical,” the Ohio Republican said during his keynote address Thursday at the National Association of Manufacturers‘ annual meeting in Washington.

“They read about the IRS abusing its power and targeting Americans for their political beliefs. They wonder about what happened in Benghazi. They see reports that journalists had their phones monitored,” he continued.

“Meanwhile, here in Washington, there has been no accountability … only an arrogance of power that puts politics ahead of doing the right thing. When government is out of control like this, at odds with the people it’s supposed to serve, it makes it that much harder to do our work, to grow our economy.

“The arrogance we’re seeing now is the same arrogance that has left our economy plodding along.”

Boehner also blamed the president’s economic policies for stagnant growth and unemployment numbers, saying, “Under the Obama administration, it’s become harder than ever to build in this country. Red tape, an outdated tax code, and shortsighted policies are driving up the cost of everything, stifling innovation, and sending jobs and opportunities to competitors like China.

“Politicians and bureaucrats bet taxpayer money on pet projects like Solyndra while blocking private initiatives like the Keystone pipeline,” he added.

Putting in a plug for what he calls the Republican plan for economic growth and jobs, Boehner said, “We need a new approach that revives tried and true habits, an approach that removes obstacles to growth and prosperity, an approach that encourages every firm, every small business, and every person to create wealth and contribute to growth.”

Boehner also used the occasion to argue in favor of immigration reform, maintaining that it would be a boon to the economy.

“To become a nation of builders again, we need to reform our immigration system,” he said. “Because securing our borders, enforcing our laws, and making the process of becoming a legal immigrant fairer will help America remain a magnet for the brightest minds and hardest workers.”

© 2013 Newsmax. All rights reserved.

Ryan: I’ll Debate Anyone on Immigration.


Image: Ryan: I'll Debate Anyone on Immigration

By Melanie Batley

Rep. Paul Ryan says the proposal set out in the Senate’s immigration reform bill offering a pathway to citizenship for the nation’s 11 million undocumented immigrants is not “amnesty” as opponents have put it, but “earned legalization.”

The Republican from Wisconsin pledged he would “debate anybody” who believed otherwise, Yahoo News reported.

“Earned legalization is not amnesty,” Ryan said during a forum on immigration sponsored by the National Association of Manufacturers. He pointed to conditions in the Senate immigration bill that would require illegal immigrants to pay a fine, back taxes, undergo extensive background checks, and sit out a probationary period before starting the path to citizenship, which could take up to 15 years.

“I will debate anybody who tried to suggest that these ideas that are moving through Congress are amnesty. They’re not. Amnesty is wiping the slate clean and not paying any penalty for having done something wrong.”

Ryan has become one of the House GOP’s most vocal supporters of immigration reform, especially since fellow Republican Raul Labrador of Idaho left the House’s own Gang of Eight.

On Tuesday, the Senate voted by a huge 82-15 majority to begin debate and amendments on the bipartisan Gang of Eight’s immigration proposals.

Ryan said he expected the bill to be broken up into several pieces of legislation so as to allow its ultimate passage through the Senate. He said he expected the House would take a similar approach.

“One big bill usually crashes under its own weight. That’s what we had in 2006. But if we had a bill that’s broken up into a few pieces, all of which can join in the end of a process, then you can get all of these things moving,” he said.

© 2013 Newsmax. All rights reserved.

Jobs report finds little overall progress. Why is recovery so slow?.


Jobs report says the unemployment rate was 7.8 percent in December – the same as for November. Employment growth is notably slower than in past recoveries from recession.

The US unemployment rate held steady at 7.8 percent in December, with the good news being that the job market didn’t stumble because of high-stakes brinkmanship in Washington over taxes.

For now, the job market has dodged the “fiscal cliff,” but employment growth is also notably slower than in past recoveriesfrom recession.

The economy added 155,000 jobs in December, the Labor Department said Friday as it reported the results of its monthly survey of employers. A separate survey of US households found the unemployment rate unchanged, as tepid job growth was more than matched by the entry of new people into the labor force to look for work. The jobless rate for November, which had been initially reported as 7.7 percent, was revised up to 7.8 percent.

Recommended: Unemployment rate: How many Americans are really unemployed?

“Some of the uncertainties in the economy have been removed with the fiscal cliff agreement [on tax rates for 2013], but Congress failed to address the debt and deficit issues which will still be a drag on the economy,” said Chad Moutray, chief economist at the National Association of Manufacturers, in a written analysis of the labor report.

Manufacturing was one of the bright spots in the monthly numbers, showing a gain of 25,000 hires on employer payrolls.

But overall, the key phrases in the Labor Department’s description of the job market were “essentially unchanged” and “little changed.” The stock market reacted in kind, with the Standard & Poor’s 500index essentially flat Friday morning after the news.

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Why has the jobs recovery since the recession, which officially ended in 2009, been so slow?

Before looking at some answers, here’s the evidence on how the current job market compares with that in past recoveries.

The current pace of recovery is weaker than in the other recoveries since 1948, with the possible exception of the period after the economic slump of 2001.

Prior to 1990, economic recoveries tended to show a fairly quick rebound in jobs, with total US employment rising 4 percent or more within about 15 months. The past couple of decades have been a period of “jobless recoveries,” where the progress tends to be slower. The graphic attached to this article (see box near the upper-left part of the story) tells the story visually.

A quick note about the chart: The version shown here omits the 1980 recession for more visual simplicity, since the aftermath includes another recession and recovery. You can visit the original interactive version of the chart at the Federal Reserve Bank of Minneapolis.

After the 1990 recession, it took three years for the economy to create 4 percent more jobs. After the recessions that began in 2001 and 2007, it’s been even more challenging.

Today, some 42 months after the official end of the recession, employment growth is below 3 percent. And after the 2001 recession, job gains hadn’t even reached 2 percent after 42 months.

So, by that gauge, this is the worst performance other than the period after 2001. And in some ways, the current recovery lags behind even that post-2001 period. Today, total US employment is still about 3 percent below the peak it hit as the recession began. By this time after the 2001 recession, jobs lagged behind their earlier peak by about half that much.

Now for the why.

The biggest and most obvious answer has to do with debt. Recoveries after a financial crisis, when a nation is struggling with high debt burdens, tend to be protracted, many economists say. That shows up in various areas of the economy. Debt-strapped consumers boost their spending at a slower pace. Home construction doesn’t rebound the way it normally would, thanks to the aftereffects of the housing bust. Federal and state governments are looking at lean tax revenues and aren’t hiring.

Even foreign trade is affected, since the debt crisis is to some extent global. And all of the above affects the confidence of business to make new investments.

The housing market has begun to recover, and US consumers have been making progress in lightening the burden of debt. Many mortgage borrowers have already been foreclosed upon. Other families have avoided taking on new debts. But the process of “deleveraging” is still under way.

But a debt overhang may not be the whole story. After all, the other two recoveries since 1990 have also been characterized by disappointingly slow job growth.

Economists are exploring possible explanations, including:

• The long-term trend of eliminating middle-wage, middle-skill jobs through automation. This is a gradual process, but its effects may show up prominently in the wake of recessions.

• Decline in US competitiveness. Job growth would be stronger if the nation were better maintaining the strength of US manufacturers against global rivals, argue some analysts including the Information Technology and Innovation Foundation in Washington.

• A downshift in demand for jobs. The idea here is that job growth is partly a function of how many people want to work, and in the United States, the “participation rate” in the labor force has been falling since about 2001. A key question is how much of this is due to discouragement, as people who fail to find jobs stop looking, and how much is caused by other factors.

With the aging of baby boomers, a large chunk of adults is migrating above age 60 and becoming less attached to the job market, some economists note. Meanwhile, some younger groups such as teens and middle-aged men also show long-term declines in labor-force participation.

At the same time, many economists think the participation rate would climb from its current lows if the climate for jobs and wages improved.

About 1 million people are currently not in the labor force because they’re “discouraged,” according to Labor Department surveys. By comparison, some 12.2 million are officially counted as unemployed because they lack jobs and are actively looking.

Source: YAHOO NEWS.

By Mark Trumbull | Christian Science Monitor

Fiscal-cliff deal no recipe for a robust economy.


  • <p>               FILE - In this Tuesday, Jan. 1, 2013, file photo, the dome of the Capitol is reflected in a skylight of the Capitol Visitor's Center in Washington. By delaying hard choices on spending, the fiscal cliff deal guaranteed more confrontation and uncertainty this year, especially when Congress must vote later this winter to raise the government’s borrowing limit. That’s likely to keep businesses cautious about hiring and investing. (AP Photo/Jacquelyn Martin, File)

    Enlarge PhotoAssociated Press

    FILE – In this Tuesday, Jan. 1, 2013, file photo, the dome of the Capitol is reflected in a skylight of the Capitol Visitor’s Center in Washington. …more 

Further budget fights threaten to keep US growth and hiring sluggish for much of 2013

WASHINGTON (AP) — Housing is rebounding. Families are shrinking debts. Europe has avoided a financial crackup. And the fiscal cliff deal has removed the most urgent threat to the U.S. economy.

So why don’t economists foresee stronger growth and hiring in 2013?

Part of the answer is what Congress’ agreement did (raise Social Security taxes for most of us). And part is what it didn’t do (prevent the likelihood of more growth-killing political standoffs).

By delaying painful decisions on spending cuts, the deal assures more confrontation and uncertainty, especially because Congress must reach agreement later this winter to raise the government’s debt limit. Many businesses are likely to remain wary of expanding or hiring in the meantime.

One hopeful consensus: If all the budgetary uncertainty can be resolved within the next few months, economists expect growth to pick up in the second half of 2013.

“We are in a better place than we were a couple of days ago,” Chad Moutray, chief economist for the National Association of Manufacturers, said a day after Congress sent President Barack Obama legislation to avoid sharp income tax increases and government spending cuts. But “we really haven’t dealt with the debt ceiling or tax reform or entitlement spending.”

Five full years after the Great Recession began, the U.S. economy is still struggling to accelerate. Many economists think it will grow a meager 2 percent or less this year, down from 2.2 percent in 2012. The unemployment rate remains a high 7.7 percent. Few expect it to drop much this year.

Yet in some ways, the economy has been building strength. Corporations have cut costs and have amassed a near-record $1.7 trillion in cash. Home sales and prices have been rising consistently, along with construction. Hiring gains have been modest but steady. Auto sales in 2012 were the best in five years. The just-ended holiday shopping season was decent.

Bernard Baumohl, chief global economist for the Economic Outlook Group, thinks the lack of finality in the budget fight is slowing an otherwise fundamentally sound economy.

“What a shame,” Baumohl said in a research note Wednesday. “Companies are eager to ramp up capital investments and boost hiring. Households are prepared to unleash five years of pent-up demand.”

The economy might be growing at a 3 percent annual rate if not for the threat of sudden and severe spending cuts and tax increases, along with the haziness surrounding the budget standoff, says Ethan Harris, co-director of global economics at Bank of America Merrill Lynch.

Still, Congress’ deal delivered a walloping tax hike for most workers: the end of a two-year Social Security tax cut. The tax is rising back up to 6.2 percent from 4.2 percent. The increase will cost someone making $50,000 about $1,000 a year and a household with two high-paid workers up to $4,500.

Mark Zandi, chief economist at Moody’s Analytics, calculates that the higher Social Security tax will slow growth by 0.6 percentage point in 2013. The other tax increases — including higher taxes on household incomes above $450,000 a year — will slice just 0.15 percentage point from growth, Zandi says.

Congress’ deal also postpones decisions on spending cuts for military and domestic programs, including Medicare and Social Security. In doing so, it sets up a much bigger showdown over raising the government’s borrowing limit. Republicans will likely demand deep spending cuts as the price of raising the debt limit. A similar standoff in 2011 brought the government to the brink of default and led Standard & Poor’s to yank its top AAA rating on long-term U.S. debt.

Here’s how key parts of the economy are shaping up for 2013:

— JOBS

With further fights looming over taxes and spending, many companies aren’t likely to step up hiring. Congress and the White House will likely start battling over raising the $16.4 trillion debt limit in February.

Many economists expect employers to add an average of 150,000 to 175,000 jobs a month in 2013, about the same pace as in 2011 and 2012. That level is too weak to quickly reduce unemployment.

The roughly 2 million jobs Zandi estimates employers will add this year would be slightly more than the 1.8 million likely added in 2012. Zandi thinks employers would add an additional 600,000 jobs this year if not for the measures agreed to in the fiscal cliff deal.

Federal Reserve policymakers have forecast that the unemployment rate will fall to 7.4 percent, at best, by year’s end. Economists regard a “normal” rate as 6 percent or less.

— CONSUMER SPENDING

Consumer confidence fell in December as Americans began to fear the higher taxes threatened by the fiscal cliff. Confidence had reached a five-year high in November, fueled by slowly declining unemployment and a steady housing rebound. Consumer spending is the driving force of the economy.

But the deal to avoid the cliff won’t necessarily ignite a burst of spending. Taxes will still rise for nearly 80 percent of working Americans because of the higher Social Security tax rate.

Since the recession officially ended in June 2009, pay has barely kept up with inflation. The Social Security tax increase will cut paychecks further. And with the job market likely to remain tight, few companies have much incentive to hand out raises.

Thanks to record-low interest rates, consumers have whittled their debts to about 113 percent of their after-tax income. That’s the lowest share since mid-2003, according to Haver Analytics. And the delinquency rate for users of bank credit cards is at an 18-year low, the American Bankers Association reported Thursday.

Yet that hardly means people are ready to reverse course and ramp up credit-card purchases. Most new spending would have to come from higher incomes, says Ellen Zentner, senior economist at Nomura Securities.

“We don’t see the mindset of, ‘Let’s run up the credit card again,'” she says.

— HOUSING

Economists are nearly unanimous about one thing: The housing market will keep improving.

That’s partly because of a fact that’s caught many by surprise: Five years after the housing bust left a glut of homes in many areas, the nation doesn’t have enough houses. Only 149,000 new homes were for sale at the end of November, the government has reported. That’s just above the 143,000 in August, the lowest total on records dating to 1963. And the supply of previously occupied homes for sale is at an 11-year low.

“We need to start building again,” says Patrick Newport, an economist at IHS Global Insight.

Sales of new homes in November reached their highest annual pace in 2½ years. They were 15 percent higher than a year earlier. And October marked a fifth straight month of year-over-year price increases in the 20 major cities covered by the Standard & Poor’s/Case-Shiller national home price index.

Potential homebuyers “are more likely to buy, and banks are more likely to lend” when prices are rising, says James O’Sullivan, chief U.S. economist at High Frequency Economics. “It feeds on itself.”

Higher prices are also encouraging builders to begin work on more homes. They were on track last year to start construction of the most homes in four years.

Ultra-low mortgage rates have helped spur demand. The average rate on the U.S. 30-year fixed mortgage is 3.35 percent, barely above the 3.31 percent reached in November, the lowest on records dating to 1971.

Housing tends to have an outside impact on the economy. A housing recovery boosts construction jobs and encourages more spending on furniture and appliances. And higher home prices make people feel wealthier, which can also lead to more spending.

“When you have a housing recovery, it’s nearly impossible for the U.S. economy to slip into recession,” Zentner says.

— MANUFACTURING

Factories appear to be recovering slowly from a slump last fall. The Institute for Supply Management’s index of manufacturing activity rose last month from November. And a measure of employment suggested that manufacturers stepped up hiring in December. Factories had cut jobs in three of the four months through November, according to government data.

Another encouraging sign: Americans are expected to buy more cars this year. That would help boost manufacturing output. Auto sales will likely rise nearly 7 percent in 2013 over last year to 15.3 million, according to the Polk research firm. Sales likely reached 14.5 million last year, the best since 2007. In 2009, sales were just 10.4 million, the fewest in more than 30 years.

And if Congress can raise the federal borrowing limit without a fight that damages confidence, companies might boost spending on computers, industrial machinery and other equipment in the second half of 2013, economists say. That would help keep factories busy.

Source. YAHOO NEWS.

By Christopher s. Rugaber and Paul Wiseman, AP Economics Writers | Associated Press

112-year-old US apparel maker in Pa. to close.


ORWIGSBURG, Pa. (AP) — One of the last U.S. apparel manufacturers of its kind is losing its shirt.

FesslerUSA had survived war and depression, free trade and foreign imports, producing millions of knitted garments from its base in eastern Pennsylvania. Five years ago, third-generation ownerWalter Meck and his family were feeling so good about the company’s prospects they doubled capacity, moving into a former pencil factory outside the small town of Orwigsburg.

They were still setting up shop in the new place when the Great Recession hit.

Sales plummeted. Financing dried up. And, after a long struggle to keep the manufacturer afloat,Meck has finally run out of time and money, still awaiting the strong economic rebound that never came. Production will shut down in early November, tossing 130 employees out of work and ending a run of nearly 113 years.

“We’re not even on life support any more,” the downcast CEO said in an interview on the floor of his cavernous factory, ominously quiet on a recent workday.

Meck blames the historic mill’s demise on weak consumer spending, fresh competition from Asia, tighter credit standards that he said prevented Fessler from getting a desperately needed loan, and a lack of interest from private investors and potential buyers.

In Schuylkill County, an economically distressed region where good-paying jobs can be hard to come by, Fessler’s workers are jittery.

Cutting room manager Gloria Bambrick, 57, has worked in the garment industry for 32 years. Her previous two employers also shut their doors. With Fessler set to join them, she’s not sure what she will do.

“It’s going to be tough for me to get a job because of my age,” said Bambrick, who became the sole breadwinner for her stepdaughter and elderly mother after the recent death of her husband. “I am very strapped. I will need a good job.”

Bemoaning the disappearance of so many textile jobs, she said: “I am an American girl and I wish more people would think like me and would have left the industry here and not send it overseas.”

Indeed, it’s a minor miracle that Fessler held on this long.

Though domestic production has ticked up recently, more than 97 percent of the 19 billion pieces of apparel sold in the United States last year were made somewhere else, primarily in China and other Asian nations, according to Labor Department data compiled by the American Apparel & Footwear Association. Employment has declined 75 percent since the late 1990s, from 621,000 jobs in 1998 to 151,800 today.

Fessler had been a rare breed among apparel manufacturers not only for its longevity, but also because it controlled all aspects of production. The company weaves its own fabric, cuts it and sews it into private-label garments shipped to stores around the nation.

“There aren’t very many vertical, made-in-the-USA apparel companies left,” Meck said. “It is an incredible feeling to watch those garments go out the door.”

FesslerUSA began life in 1900 as Meck & Co., producing cotton underwear at a factory in Schuylkill Haven, a river town about 90 miles northwest of Philadelphia. Meck’s father sold it to the Fessler family in 1960. Meck joined other family members to buy the company back in 1994 — just as the North American Free Trade Agreement was claiming its three biggest customers.

The family weathered that crisis by pivoting from high-volume, mass-market apparel toward higher-end pieces made with more expensive fabrics, a segment of the market that foreign manufacturers were unable or unwilling to touch. Fessler thrived because it could produce quickly and in small quantities, and its fashionable tees appeared on the racks of such retailers as Bloomingdale’s and Nordstrom.

“We knew that it was change or die,” Meck said. “We had to reinvent ourselves.”

Change or die. It became a way of life as Fessler bucked the odds and enjoyed years of double-digit growth.

So when retail sales took a nosedive amid the worst economic crisis in 75 years, Meck knew he had to pivot once more. Gathering his employees together, he told them: “Is it more important for half of you to work, or more important for all of you to go out of business?” Fessler laid off nearly half the workforce.

The smaller, leaner company was profitable for a while. But the good times didn’t last. Sales plummeted again in 2010, and Meck could no longer cut his way to prosperity. He had to grow revenues while reducing Fessler’s dependence on women’s fashion. His team began working on new products and new markets, including a flame-resistant shirt for firefighters and utility workers that Meck said showed great promise.

But he needed time, and he needed money, and both were in short supply.

In the end, he couldn’t find the cash. And a few months ago, the bank called Fessler’s loan. The company was doomed.

Given its weak cash flow — Fessler’s sales were down 50 to 75 percent from their pre-recession peak of $25 million per year — did it ever stand a chance?

Meck, a wily businessman with nearly four decades of experience, insisted Fessler could have survived had he found a willing lender.

“Very quickly it became clear that new regulations that were being placed on banks were crippling banks’ ability to do business, and it didn’t take along for that to rumble right down and hit us square in the face,” he said.

Meck’s lament about tightened credit is a common one among small- and medium-sized manufacturers, said Chad Moutray, chief economist for the National Association of Manufacturers.

“Many of them have complained to me that the standards for borrowing have become a lot more strict since the recession,” said Moutray, formerly chief economist of the Small Business Administration. “It’s much tougher to get a loan today than it was in the past.”

Banking industry veteran Bob Seiwert agreed that lending standards have made it more difficult to get a loan, but he said banks are eager to lend to viable firms, and are even sacrificing on terms because demand is weak.

“Right now banks are awash in funds and they don’t know what to do with them. Banks are scrambling, competing for those few small business loans that are out there,” said Seiwert, a senior vice president at the American Banking Association. “Most small businesses today are on the sidelines.”

Meck acknowledged his company’s problems went deeper than its inability to get a loan. And once word got out, customers began to flee.

Fessler continues to fill existing orders, but the signs of a company on the brink are unmistakable. Most of the sewing machines sit idle, and a section of the factory is filling up with equipment destined for liquidation.

Meck tries to focus on the good times.

“I don’t want people to be sorry. I want people to be proud we lasted this long. I want people to be proud we tried,” he said. “We did good work. There is nothing to be upset about. In today’s economy and today’s world, it didn’t work.”

Source: YAHOO NEWS.

By MICHAEL RUBINKAM | Associated Press

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