3M chief predicts economic growth will slow but stay at 'reasonable' level
ST. PAUL, Minn. -- Minnesota Mining & Manufacturing Co.'s chairman and chief executive sees a U.S. economy that is slowing slightly but still has the fuel for "reasonable growth."</br></br>Inflation is essentially mute, raw-materials costs are steady and "I don't think we're going to see any negative numbers" domestically any time soon, Livio D. "Desi" DeSimone said.</br></br>The company's internal forecast is for domestic economic growth of about 2% in the second half. Characterizing the U.S. economy as "stratified," Mr. DeSimone said in an interview that the company expects some "laggard areas" to perk up in coming months. "They won't have to do a whole lot better in construction and automotive to have an improvement," he said, adding that "I think the health-care industry might do a little better."</br></br>The company is a major supplier of abrasives and fasteners to the automotive and construction industries and sells a wide range of items to the medical community. Because it does business in so many sectors of the economy, 3M sometimes is considered a bellwether for American industry.</br></br>Still, nearly 55% of its $14.2 billion in 1996 sales were overseas, and Mr. DeSimone called the impact of foreign exchange on earnings "the single biggest hit we have." In the first quarter, currency translation reduced net income by five cents a share, to 99 cents, or $410 million, on sales of $3.7 billion.