MAPI comments on industrial production report
U.S. industrial production contracted by 0.6 percent after strong gains in February and March.
in the NewsState of Logistics 2016: Pursue mutual benefit Protective packaging revenues to nearly double by 2026 As ocean cargo alliances prepare for new deployments, Port of Oakland remains “confident” A3 previews Automate 2017 show and conference Slow progress on Positive Train Control implementation remains intact, reports FRA More News
“In a disturbing report, the Federal Reserve announced that U.S. industrial production (manufacturing, mining, and utilities) contracted by 0.6 percent after strong gains in February and March,” said Cliff Waldman, senior economist for the Manufacturers Alliance for Productivity and Innovation (MAPI). “The manufacturing picture, which constitutes the lion’s share of industrial output, is bleaker. U.S. factory production declined by 0.4 percent in April and has now contracted in three of the past four months. The output backslide in April was broad-based, with widespread weakness in both durable and nondurable manufacturing. Suppliers of numerous manufacturing supply chains such as machinery, nonmetallic mineral products, and fabricated metal products all suffered contractions in production, indicating fundamental factory sector weakness. Even wood products output, which had been enjoying substantial growth as a result of the modest U.S. housing rebound, has now seen significant contractions for two consecutive months.
“The persistence of subpar performance in the U.S. economy and weakness in key areas of the global economy are weighing on U.S. factories,” Waldman added. “U.S. capital spending has been volatile, a function of cloudy expectations for U.S. and global growth as well as policy uncertainty. The recession in the 17-country Eurozone has been deeper, wider, and longer lasting than almost anyone expected. And while growth in large emerging markets that are important to manufacturing profitability has bottomed, the rebounds in China, India, and Brazil are looking to be modest at best.
“Most likely, slow growth in the U.S. and world economies will continue,” Waldman said. “Central banks are flooding the globe with liquidity, and legitimate concerns about fiscal prudence are once again being overshadowed by concerns about growth. All told, U.S. manufacturing will likely continue with slow output gains as the year progresses. But the risks of something worse cannot be ruled out.”
Subscribe to Modern Materials Handling Magazine!Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!
Lawson Products: Automation that fits Lawson’s multi-purpose distribution center View More From this Issue