Manufacturing, GDP to grow in 2013, 2014 despite headwinds – MAPI

28 February 2013 17:36  [Source: ICIS news]

HOUSTON (ICIS)--Manufacturing in the US should expand by 2.2% in 2013 and 3.6% in 2014 despite political and global economic headwinds, the Manufacturers Alliance for Productivity and Innovation (MAPI) said on Thursday.

US GDP is predicted to expand by 1.8% in 2013 and 2.8% in 2014, the MAPI said in its Quarterly Economic Forecast. The GDP forecast is unchanged from the MAPI’s November 2012 report.

“There are several reasons to be optimistic about continued economic growth in 2013 and 2014,” said Daniel Meckstroth, MAPI’s chief economist.

“Consumer deleveraging is close to an end; there are definitive signs of improvement in the housing market, especially on the supply side; and there is moderate job growth, pent-up demand and the potential for spending that was previously postponed,” he added.

The MAPI report showed mixed signals in employment, with manufacturing expected to add 87,000 jobs in 2013, down almost 47% from the association’s November forecast of 163,000 new jobs for this year.

But the MAPI increased its jobs outlook for 2014 by about 7%, forecasting an increase of 289,000 jobs in 2014 in Thursday’s report. The November report had predicted 270,000 new jobs in 2014.

The MAPI forecasts overall unemployment to average 7.7% in 2013 and 7.3% in 2014.

Meckstroth warned that US consumers will be restrained somewhat this year by the 2% payroll tax increase and governments at all levels in an austerity mode.

Business investment could be sluggish, he said, because recessions in Europe and Japan have hurt foreign affiliate earnings and limited US exports. Also, the deceleration of growth in China, Brazil and other developing countries has increased risks of a global slowdown, he said, and there remains a level of uncertainty about federal policy and the resolution of policy deadlines.

By: Jeremy Pafford
+1 713 525 2653

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