“BOSTON (Reuters) – Top U.S. manufacturers sounded a confident note about their expectations for 2013 on Wednesday as fears of the year-end “fiscal cliff” faded into memory.
Textron Inc , whose Cessna unit is the world’s biggest maker of corporate jets, laid out an earnings forecast that would represent growth of about 12 percent, while larger peer United Technologies Corp , which makes Otis elevators, Carrier air conditioners and Sikorsky helicopters among other products, reiterated a projection that its profit would rise about 13 percent.
Executives at each company said demand is recovering after a year-end pause in ordering, when customers worried about a budget standoff that could have triggered large spending cuts and higher taxes in the United States.
“We probably have had more order activity than we’re used to seeing at the beginning of January,” reflecting orders that had been delayed, Textron Chief Executive Scott Donnelly said on a conference call with analysts. “We’ll see a degree of uncertainty in the jet market as Washington works through its fiscal challenges, but we believe demand will solidify as those uncertainties are reduced.”
The Providence, Rhode Island-based company, which also makes Bell helicopters and EZ-Go golf carts, said it expects sales of its Cessna corporate jets to pick up this year.
Budget battles continue in Washington even after the White House and Congress averted a possible year-end crisis that economists called the “fiscal cliff” with warnings of another possible recession.
But the current battle seems less daunting to executives in the face of other signs of a recovering economy.
“What we see in the economy in the U.S. is that the rebound in the housing market is really having a pull-through effect on the rest of the economy,” said Greg Hayes, chief financial officer of United Tech, in an interview. “Commercial construction is coming back. We saw particular strength in North America and Asia, not as much of a story in Europe, as you can imagine.
The U.S. housing slump set the 2007-2009 recession in motion and a slow recovery in that market has been one important drag on a long, sluggish recovery. Recent government data have shown a pickup in demand, with a report last week showing housing starts surged to a four-year high in December.
‘PATH GETS EASIER’…”
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