MAPI Economic Forecast: Investment spending to drive growth

Manufacturing production expected to grow 3.2% in 2014 and 4.0% in 2015.

By ·

Manufacturing production continues to outpace overall economic growth and will be led more by investment than by consumer-driven advances over the next 18 months, according to a new report.

The Manufacturers Alliance for Productivity and Innovation (MAPI) Quarterly Economic Forecast predicts that inflation-adjusted gross domestic product will expand 2.5% in 2014 and 3.2% in 2015. The former is a decrease from 2.8% and the latter equal to the 3.2% from MAPI’s March 2014 report.

Manufacturing production is expected to fare better, with anticipated growth of 3.2% in 2014 and 4.0% in 2015, consistent with the previous report.

“While consumer-driven manufacturing will grow at a consistently moderate rate, the industries driven by investment will grow at a higher rate,” predicted MAPI chief economist Daniel J. Meckstroth, Ph.D. “Energy infrastructure and manufacturing machinery will see increases as firms replace and expand equipment. Aerospace will also experience a big ramp-up in production. In addition, there will be growth in the construction supply chain—HVAC, wood, paint, appliances, and furniture—as we anticipate both residential and nonresidential increases. The acceleration driver will be investment.”

Production in non-high-tech manufacturing industries is expected to increase 2.9% in 2014 and 3.7% in 2015. High-tech manufacturing production, which accounts for approximately 5% of all manufacturing, is anticipated to grow 6.6% in 2014 and 10.0% in 2015.

The forecast for inflation-adjusted investment in equipment is for growth of 5.2% in 2014 and 10.3% in 2015. Capital equipment spending in high-tech sectors will also rise. Inflation-adjusted expenditures for information processing equipment are anticipated to increase 2.7% in 2014 and a strong 14.6% in 2015.

MAPI expects industrial equipment expenditures to advance 8.1% in 2014 and 10.8% in 2015. The outlook for spending on transportation equipment is for growth of 5.6% in 2014 and 3.9% in 2015. Spending on nonresidential structures is anticipated to improve by 4.2% in 2014 and by 5.1% in 2015. Residential fixed investment is forecast to increase by 4.1% this year and a robust 19.9% in 2015.

“We anticipate 1.03 million housing starts in 2014 and 1.40 million starts in 2015,” Meckstroth said. “Manufacturing production will finally approach its 2008-2009 pre-recession peak by the end of 2014.”
Inflation-adjusted exports are anticipated to increase 3.0% in 2014 and 5.1% in 2015. Imports are expected to grow 2.1% in 2014 and 6.8% in 2015. MAPI forecasts overall unemployment to average 6.4% in 2014 and drop to 5.9% in 2015.

The outlook is for an increase of 158,000 manufacturing jobs in 2014, a decline from the anticipated 356,000 jobs in the March forecast, but increasing to 212,000 jobs in 2015, an increase from 197,000 jobs in the previous report.

The refiners’ acquisition cost per barrel of imported crude oil is expected to average $95.90 in 2014 and $93.60 in 2015.


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 · Supply Chain · U.S. Manufacturing · · All Topics
Latest Whitepaper
Gaining Efficiencies Through End-to-end Warehouse Automation
Warehouse and distribution center managers in B2B and B2C have never been under more pressure to scale up their operations to meet customer demands in the new, digital economy. Warehouse Automation Custom digital issue, Peerless custom Automation white paper. Warehouse Automation research papers.
Download Today!
From the September 2016 Issue
The fashion retailer has used warehouse execution software and automation to create a true omni-channel distribution center.
Lift Truck Tips: Knowledge is Power
Software system gives new facility a competitive edge
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
5 Emerging Technologies Enabling Competitive Advantage for Distribution
Come hear about the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids that are enabling competitive advantage for distribution.
Register Today!
EDITORS' PICKS
American Eagle Outfitters’ omni-channel journey
The fashion retailer has used warehouse execution software and automation to create a true...
The data-driven lift truck
Now that manufacturers and distributors are using the data from their automated systems to drive...

Destination Maternity: Destination Automation
Running short of space in its old facility, Destination Maternity Corp. built a new, highly...
Hibbett Sports: Faster, Flexible and Efficient
A high-speed conveyor and sortation system at Hibbett Sports’ Alabama distribution center speeds...