President Bush signs American Jobs Creation Act

Demand for factory construction may increase

President Bush recently signed the American Jobs Creation Act, which will gradually lower the tax rate on domestic manufacturing, including most construction, architectural, and engineering services. The law also repeals an export tax break that the World Trade Organization ruled was an illegal subsidy.

The European Union (EU) had recently imposed steadily rising tariffs, which are currently at a 12% rate, on a broad range of manufactured goods, in order to pressure the United States to repeal the tax break. On Oct. 18 the EU announced that it would suspend the tariff on January 1, 2005, when the repeal takes effect.

Also on Oct. 18, the value of the dollar hit a 12-year low against the Canadian dollar and multi-month lows against numerous other currencies, which should make U.S. exports more price-competitive.