US manufacturing recovery to continue this year and next – group

22 March 2012 17:58  [Source: ICIS news]

WASHINGTON (ICIS)--The recovery in US manufacturing sectors is continuing and should experience more expansion this year and next at rates exceeding overall US gross domestic product (GDP) growth, a leading production group said on Thursday.

The Manufacturers Alliance for Productivity and Innovation (MAPI) said that its quarterly analysis of 27 major manufacturing industries indicates that “The US manufacturing recovery continues on track and should outperform overall GDP growth through 2013”.

MAPI chief economist Daniel Meckstroth noted that “There exists pent-up demand for consumer durable goods, particularly for motor vehicles, and firms are profitable and need to spend more for both traditional and high-tech business equipment”.

In addition, he said, “there is strong, though decelerating, growth in emerging economies that is still driving US exports”.

He said that while the global economy remains volatile, the risk of recession for the US has receded in the last three months.

Meckstroth noted, however, that political and military risks cannot be directly modelled in economic forecasts, suggesting that a looming conflict with Iran or the still wobbly EU bailout of Greece could change the outlook quickly.

He said that US manufacturing industrial production grew at 4.5% in 2011, and MAPI’s outlook analysis indicates that growth will be somewhat slower but still strong this year at 4%, slipping to a still respectable 3.5% advance in 2013.

Those growth rates for manufacturing compare favourably with MAPI’s forecast of overall GDP expansion of 2.2% this year and 2.4% in 2013.

The broad US manufacturing industry is a major downstream consuming sector for chemicals and plastics, especially automobile production, durable goods manufacturing and new home construction.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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