Outlook on Economy Is Less Strong Overseas

The recently stronger economic growth in the U.S. has not been matched elsewhere, except in the small Asia-Pacific countries that rely heavily on exports to the U.S. The three key countries for U.S.-printed product exports all had a slowdown in growth earlier this year, and are expected to recover more slowly than the U.S.

SARS, mad cow disease, and a 13% currency appreciation stalled the Canadian economy at 0.0% growth in the spring. Today, the more expensive currency will keep growth limited to about a 3% pace through 2004. In the United Kingdom, GDP growth fell under 1% earlier this year under pressure from a mild recession in continental Europe, but is forecast to average over 2% through the end of next year. The Mexican economy sunk back into recession early this year from the combined impact of fewer exports to the U.S., and the loss of manufacturing business to an even cheaper China. Mexico is growing again, but 2003-2004 growth will fall well short of the potential 6% growth rate.

Product-related printing continues to be increasingly outsourced abroad, along with the manufacture of the products themselves. This should subside soon, but not reverse, following the year-long decline of the U.S. dollar.