Computers, telecommunication companies projected to thrive this year

WASHINGTON (AP) -- The strong performance of information technology companies should keep the U.S. economy steaming ahead this year, the Commerce Department predicted Tuesday in its annual forecast of winners and losers in American business.

The list of winners was dominated by computer and telecommunication companies. Businesses making semiconductors and related devices for computers led all others with a projected jump in shipments this year of 23 percent, which would follow a strong 22.2 percent gain in 1999.

In all, five of the top six spots in the list of fastest growing industries were held by companies involved in manufacturing computers or computer parts or telecommunication equipment, according to the department's ''U.S. Industry and Trade Outlook 2000'' report.

''The United States is an economic powerhouse,'' Commerce Secretary William Daley said in the report. ''Fueled by a revolution in information technology, we are experiencing the lowest unemployment rate in 30 years.''

The Commerce Department report, which has been issued since 1960, predicted that 75 percent of manufacturing industries and all the major service sectors will enjoy positive growth this year.

However, the report forecast rough sailing for some U.S. industries. The biggest loser was projected to be aircraft manufacturing, which the department forecast would suffer a 20.4 percent drop in shipments following an 8 percent increase in 1999.

The report said aircraft manufacturers were suffering from a falloff in orders in Asia in the wake of the Asian financial crisis.

In addition to aircraft manufacturers, the report predicted declines in shipments of aircraft engines, down 8 percent, and aircraft parts, down 7.8 percent this year.

Other big losers in terms of projected percentage drops were manufacturers of women's handbags and purses, down 13.4 percent; personal leather goods, down 10.6 percent, and leather gloves, down 8.8 percent.

The report offered these highlights:

INFORMATION TECHNOLOGY: Computers, telecommunications and semiconductors continue to lead the economy with double-digit growth forecast, reflecting strong investment by businesses and high demand by consumers. Continued demand for faster, smaller, more functional electronic products will fuel demand for printed circuit boards, the nervous system of electronic devices, with shipments expected to rise by 9.2 percent this year.

AUTOMOTIVE: Shipments of motor vehicles were projected to decline by 1.7 percent this year, reflecting a slight slowdown following dramatic gains in recent years. Auto parts sales were forecast to increase by 5.1 percent, fueled by rising demand from motorists keeping cars on the road longer.

HEALTH: Outlays for health care are expected to rise to $1.3 trillion this year, an increase of 7.1 percent over the $1.2 trillion spent in 1999. The share of total spending that goes to hospitals is expected to decline from 34.6 percent in 1996 to 32 percent by 2001 while payments to doctors will increase as more Medicare beneficiaries enroll in managed care plans.

On the Net: Copies can be purchased from the Commerce Department's National Technical Information Service: http://www.ntis.gov