13 September 2010 20:00 [Source: ICIS news]
WASHINGTON (ICIS)--The US manufacturing sector is doing better than the nation’s overall economy, but growth is cooling and will weaken next year, meaning that pre-recession levels will not be reached until late in 2012, an industry group said on Monday.
The Manufacturers Alliance said in its quarterly economic outlook that manufacturing industrial production is on a course to 6% growth overall for this year.
But production and output are beginning to decelerate, the alliance’s report said, and manufacturing growth likely will ease to 5% in 2011.
However, manufacturing industries in general are doing better than the nation’s economy overall, according to the report.
“The pace of recovery in the general economy has clearly slowed, but the deceleration is less visible in the manufacturing sector,” the alliance said.
Production industries benefitted from foreign trade and domestic business investments, according to the report.
“Exports are predominantly manufactured goods, and they benefitted from the fast global trade bounce-back,” said Daniel Meckstroth, chief economist at the alliance.
In addition, he said, “Business investment in equipment rebounded much faster than consumer spending, thus making the pace of the industrial recovery stronger than that in the general economy”.
US gross domestic production (GDP) - the measure of all commerce and services - fell to an annualized rate of 1.6% in the second quarter, but manufacturing grew at a brisk 8% during the same period, according to the alliance.
But that fast-paced second-quarter rate of manufacturing expansion will not last.
The alliance report predicted that “the superior growth trend for manufacturing will continue, but decelerate, increasing 6% overall in 2010 and advancing 5% in 2011”.
“At this pace, it will be late 2012 before manufacturing production exceeds the December 2007 pre-recession level,” the alliance said.
US manufacturing industries constitute a major consumer sector for petrochemicals, downstream chemicals and plastics.
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