MAPI Quarterly U.S. Industrial Outlook: Rebound in production, modest to moderate growth

Forecast for Industrial Production to Grow 3.1 Percent in 2013, 3.6 Percent in 2014.

By ·

Strong industrial activity in early 2013 softened somewhat recently but the sector should have enough momentum to continue growth, according to the quarterly Manufacturers Alliance for Productivity and Innovation U.S. Industrial Outlook, a report that analyzes 27 major industries.

Inflation-adjusted GDP increased at a 2.4% annual rate in the first quarter of 2013, while manufacturing output grew at a much faster 5 % annual rate.

MAPI forecasts that industrial production will increase 3.1% in 2013, an increase from 2.2% in the March 2013 forecast. A further pickup is likely in 2014, with growth anticipated to be 3.6%, commensurate with the previous report. Manufacturing production should outperform GDP growth, which MAPI estimates will be 1.8% in 2013 and 2.8% in 2014.

“The superior growth in manufacturing production earlier this year was due to strong growth in housing starts, auto sales, and inventory rebuilding that disproportionately benefits manufacturing,” said MAPI chief economist Daniel J. Meckstroth, Ph.D., author of the analysis. “When there is a large inventory build in one quarter, however, the gain tends to reverse in the next period and we saw that in March and April. We expect acceleration in the general economy and a rebound in manufacturing production in the second half of this year, but nothing to suggest anything more than a return to modest to moderate growth.”

The report offers economic forecasts for 24 of the 27 industries. MAPI anticipates that 18 industries will show gains in 2013, three will remain flat, and three will decline. Housing starts should see a 26% increase while motor vehicles and parts production is forecast to advance by 8%. The outlook improves in 2014, with growth likely in 23 of 24 industries, led by housing starts at 26%. Public works construction is the lone industry expected to decline in 2014, by 1%.

According to the report, non-high-tech manufacturing production (which accounts for 95% of the total) is anticipated to increase 3 % in 2013, an improvement from 1.8% in the previous forecast, and grow by 3.5% in 2014, a slight deceleration from 3.8% in the March analysis. High-tech industrial production (computers and electronic products) is projected to expand by 4.4% in 2013, an improvement from 4.3% growth anticipated in MAPI’s March report. An advance to 6.1% growth is forecast for 2014, a downward revision from 9% in the previous outlook.

Thirteen of the 27 industries MAPI monitors had inflation-adjusted new orders or production above the level of one year ago (four fewer than reported last quarter), four were flat, and 10 declined. Housing starts grew by 31% in the three months ending April 2013 compared with the same period one year earlier, followed by construction machinery at 9% in the same time frame. The largest drop came in electronic computer shipments, which declined by 25%.

Meckstroth reported that 7 industries are in the accelerating growth (recovery) phase of the business cycle; 11 are in the decelerating growth (expansion) phase; six are in the accelerating decline (either early recession or mid-recession) phase; and three are in the decelerating decline (late recession or very mild recession) phase.

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
Hydrogen, the Future of Materials Handling
Large, successful organizations are integrating hydrogen fuel cell technology into their lift truck fleets and benefiting from lower operational costs, reduced emissions and improved reliability.
Download Today!
From the October 2016 Issue
Brownells’ new Iowa distribution center has taken touches—and miles—out of the order fulfillment process and increased throughput with near 100% accuracy.
System Report: Brownells new DC is flexible and responsive
Pallet Usage Report: Pallets Remain Critical in the Modern-Day Warehouse
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Pallets: Supporting Product, Processes and the Enterprise
The smallest leak in performance or cost can bring a lean, nimble and speedy supply chain to a halt. During this 30-minute webcast we'll examine how Modern's readers use pallets to keep the wheels turning as they maneuver a road filled with sharp edges and potholes.
Register Today!
Modern Materials Handling’s 2017 Casebook Collection
The 2017 Casebook features more than 35 case studies that put the spotlight on successful innovation...
Brownells: Designing for Efficiency and Growth
Brownells’ new Iowa distribution center has taken touches—and miles—out of the order...

Industry celebrates National Manufacturing Day
Fourth annual Manufacturing Day is a grassroots effort by U.S. manufacturers to improve the public...
American Eagle Outfitters’ omni-channel journey
The fashion retailer has used warehouse execution software and automation to create a true...