“Manufacturing production should outperform GDP growth…”

The U.S. manufacturing recovery continues on track and should outperform overall GDP growth through 2013, according to the Manufacturers Alliance for Productivity and Innovation (MAPI) U.S. Industrial Outlook (E0-103), a quarterly report that analyzes 27 major industries.
Manufacturing outlook is positive.

“There exists pent-up demand for consumer durable goods, particularly for motor vehicles, and firms are profitable and need to spend more for both traditional and high-tech business equipment,” said Daniel J. Meckstroth, Ph.D., MAPI Chief Economist and author of the analysis.

“In addition, strong—though decelerating—growth in emerging economies is still driving U.S. exports.”

Despite the fact that the global economy remains volatile, Meckstroth said the risk of recession for the U.S. has receded in the last three months.
Takeaway for precision machining shops:
Manufacturing industrial production increased 4.5 percent in 2011. MAPI forecasts that it will increase 4 percent in 2012 and 3.5 percent in 2013. The 2012 forecast is up 1 percent and the 2013 forecast is down 0.5 percent from the December 2011 report. Manufacturing production should outperform GDP growth, which MAPI estimates will be 2.2 percent in 2012 and 2.4 percent in 2013.

I like it when I find an authority with clear facts to share.
Facts that I want to help share.

Daniel J. Meckstroth

The following is an analysis from Daniel J. Meckstroth, Ph.D., Chief Economist for the Manufacturers Alliance/MAPI, regarding the Institute for Supply Management (ISM) Index for August 2010 (the ISM Index was 56.3 percent, an 0.8 percentage point improvement over July).

Manufacturing has consistently outperformed the pace of growth in the general economy during this recovery,” he said.  “For example, GDP increased only at a 1.6 percent annual rate in the second quarter of 2010 but manufacturing industrial production expanded at a 7.9 percent rate.  Amidst evidence that the general economy is slowing to a crawl, this report indicates that manufacturing activity continues to grow at a healthy pace.  Industrial firms are building inventories that were depleted during the recession and exports are surging in machinery and equipment and material industries. 
“The strong growth in manufacturing production is partly catch up for a substantially more severe recession in the industry than the overall economy,” he added.  “Also, the depth and length of the previous downturn built pent up demand for replacing big ticket consumer goods and repair and replacement in business.  We expect manufacturing production to decelerate in the near term but still grow faster than overall GDP.”


MAPI Press Release