Computer manufacturing enters a new era of growth, (EXCERPT), Monthly Labor Review Online, September 1986

Computer manufacturing
enters a new era of growth

Marcus E. Einstein and James C. Franklin

From the early 1960's through the mid-1980's, the outlook for growth in the computer manufacturing industry was, for most of the period, unusually optimistic. Even the 1981-82 recession seemed to have little effect on the industry's growth. In 1985, however, the outlook for the industry clouded considerably. Business demand for computers fell, as well as the demand for home computers. Some companies reported huge losses, and several went bankrupt. Even firms in Silicon Valley, an important center for computer manufacturing, laid off workers. The industry is now apparently at a turning point, entering an era of slower growth.

To provide some insights into the current situation, the Bureau of Labor Statistics undertook a study that focused on the development of alternative projections of industry output and employment. This article presents the results of that study.

For several decades, the Bureau of Labor Statistics has developed projections of the U.S. economy under alternative sets of assumptions. The latest set of three projections, to 1995, were published in the November issue of the Monthly Labor Review.¹ These and previous BLS projections were based on alternative macroeconomic assumptions, such as the unemployment rate, productivity growth, and labor force growth. While the projections for the computer manufacturing industry presented in this study reflect the recent economic projections, industry alternatives that assume different circumstances regarding the pace of technological development in the industry are also explored.

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Footnotes

1 See Betty W. Su, "The economic outlook to 1995: new assumptions and projections"; Howard N Fullerton, Jr, "The 1995 labor force: BLS' latest projections"; Valerie A. Personick, "A second look at industry output and employment trends through 1995"; and George T. Silvestri and John M. Lukasiewicz, "Occupational employment projections: the 1984-95 outlook," Monthly Labor Review, November 1985, pp. 3-59.

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