ISM conference focuses on economic recovery

While The Institute for Supply Management’s (ISM) Semi-annual Economic Forecast suggests economic growth through 2011, one prominent economist said there’s still reason to worry.

Speaking at ISM’s annual International Supply Management Conference in Orlando this week, J.P. Morgan’s David Hensley, opined that U.S. manufacturers still need to “step up” when it comes to hiring.

“Erosion of potential output is a concern,” he said, “and keeping workers with old skills is not going to solve the problem.”

Hensley, who serves as executive director and global economics coordinator for Morgan’s economic research department, said that without new job creation, industrial production will lose momentum.

“Job growth is essential for home sales recovery, too,” he said. “Other real estate issues should also be a concern.”

He said that the U.S. has been too slow to deal with another ongoing problem: the national deficit.

“It may be too hard to get up to speed when it comes to recovering from legacy costs,” he said. “But something must be done.”

Finally, he noted that rising commodity prices will have a big impact on future purchasing, thereby placing more pressure on the nation’s retailers.

“On the optimistic side, however, it’s heartening to see that our financial markets remain resilient,” said Hensley. “One certainly hopes that will continue.”

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