Manufacturing continues its forward growth, according to the Manufacturers Alliance for Productivity and Innovation (MAPI) U.S. Industrial Outlook report.
While manufacturing industrial production increased 4.5% in 2011 and will increase 4% in 2012 and 3.5% in 2013, it will still outperform GDP growth, which MAPI estimates will be 2.2% in 2012 and 2.4% in 2013.
The 2012 forecast is up 1% and the 2013 forecast is down 0.5% from the December 2011 report.
Looking at particular sectors, non-high-tech manufacturing production (which accounts for 90% of the total) is anticipated to increase 3% in both 2012 and in 2013.
High-tech industrial production (computers and electronic products) is projected to expand by 4% in 2012 and show 9% growth in 2013.
Engine, turbine, and power transmission equipment grew by 35% in the three months ending January 2012 compared to the same period one year earlier, while housing starts improved by 22% in the same time frame.
The largest drop came in public construction and heating, ventilation, air conditioning, and refrigeration equipment, each declining by 6%.
“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.
“Although political and military risks cannot be directly modeled, the financial market conditions and long lead time economic indicators are less threatening,” he noted.