MAPI Economic Forecast: Confluence of sluggish pace, volatility, optimism

Manufacturing production expected to increase 3.1% in 2013 and 3.6% in 2014; Projections for 1.8% GDP growth in 2013 and 2.8% growth in 2014.

By ·

U.S. economic growth will be somewhat restrained, but not deterred, and improving fundamentals provide reason for optimism by the end of 2013 and through 2014, according to a new forecast.

The Manufacturers Alliance for Productivity and Innovation (MAPI) Quarterly Economic Forecast predicts that inflation-adjusted gross domestic product (GDP) will expand 1.8% in 2013 and 2.8% in 2014, showing no change from MAPI’s February 2013 report.

Manufacturing production, however, is expected to show growth of 3.1% in 2013 and 3.6% in 2014. The 2013 figure is an increase from 2.2% and the 2014 estimate is on par with the 3.6% predicted in the February forecast.

“There are a number of reasons for an improved outlook,” noted MAPI Chief Economist Daniel J. Meckstroth, Ph.D. “Consumer deleveraging is close to an end and households have the capacity to use more credit; housing prices are rising and with that change comes a virtuous cycle of increasing wealth, consumption, and income that feeds back into more housing activity; pent-up demand is releasing postponed spending for consumer durable goods; and the job market is repairing itself—employment growth is more balanced among the various sectors.”

Meckstroth noted that growth prospects might have been higher without the headwinds of wages rising lower than inflation; spendable income being reduced by higher taxes; government austerity worsening as sequestration cuts are reflected in spending reductions; and negative net exports both this year and next.

Production in non-high-tech industries is expected to increase 3.0% in 2013 and 3.5% in 2014. High-tech manufacturing production, which accounts for approximately 10% of all manufacturing, is anticipated to grow 4.4% in 2013 and 6.1% in 2014.

The forecast for inflation-adjusted investment in equipment and software is for growth of 5.6% in 2013 and 7.4% in 2014. Capital equipment spending in high-tech sectors will also rise. Inflation-adjusted expenditures for information processing equipment are anticipated to increase 6.3% in 2013 and 8.0% in 2014.

MAPI expects industrial equipment expenditures to advance 5.0% in 2013 and 11.4% in 2014. The outlook for spending on transportation equipment is for growth of 1.6% in 2013 and 5.5% in 2014. Spending on nonresidential structures will advance 2.6% in 2013 before improving 4.8% in 2014.

Inflation-adjusted exports are anticipated to increase 2.0% in 2013 and 4.5% in 2014. Imports are expected to grow 1.7% in 2013 and 5.2% in 2014. MAPI forecasts overall unemployment to average 7.6% in 2013 and 7.2% in 2014.

“Despite the volatility and struggle for growth, economic fundamentals have definitely improved,” Meckstroth said.

Such positives can be seen in MAPI’s prospects for employment. Manufacturing is expected to see a net increase in hiring, with the sector anticipated to add 137,000 jobs in 2013, well above the February forecast of 87,000 jobs. The outlook is for an increase of 352,000 jobs in 2014, an even larger advance from the 289,000 previously forecast.

The refiners’ acquisition price per barrel of imported crude oil is expected to average $96.80 per barrel in 2013 and $93.60 in 2014.


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!

Article Topics

Economy · MAPI · · All Topics
Latest Whitepaper
Evaluating Goods-to-Person Technologies
This white paper overviews the various, self-contained, goods-to-person AS/RS systems available for handling the totes, cases and eaches most frequently faced by e-commerce order fulfillment operations, and the typical applications for each.
Download Today!
From the May 2017 MMH Issue
Every company considers itself an innovator. It’s time to include materials handling leaders in that category.
Top 20 Worldwide Materials Handling Systems Suppliers 2017
ERP Suppliers’ Changing Role
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2016 Warehouse/DC Operations Webcast: Confronting omni-channel complexity
During this webcast we’ll examine the current activities, trends, and best practices in warehouse and DC operations management and how companies plan to address complex issues associate with omni-channel fulfillment.
Register Today!
EDITORS' PICKS
Materials Handling Innovation (and why it matters)
Every company considers itself an innovator. It’s time to include materials handling leaders in...
Thrive Market’s Startup Distribution Network
How does a fastgrowing, e-commerce startup company build out order fulfillment capabilities? Thrive...

U.S. Roadmap for Material Handling & Logistics: Version 2.0 released today
On Tuesday, the U.S. Roadmap for Material Handling & Logistics: Version 2.0 will be released on...
2017 Productivity Achievement Awards
Modern’s annual Productivity Achievement Awards honor companies that have made exceptional...