17 June 2013 18:39 [Source: ICIS news]
WASHINGTON (ICIS)--US manufacturing output grew at a 5% annual rate in the first quarter this year, a key industry outlook reported on Monday, and growth in the nation’s production industries is expected to lead the overall economy this year and next.
In its quarterly outlook for industrial performance, the Manufacturers Alliance for Productivity and Innovation (MAPI) said that while manufacturing output has softened somewhat since that strong first quarter, it likely will see full-year 2013 expansion of 3.1%.
Compared with the 5% annual growth rate produced by manufacturers in the first quarter, the US economy overall saw an annualised gain in gross domestic product (GDP) of 2.4%.
As noted in its earlier quarterly outlook for the overall economy, MAPI economists expect the US will see full-year 2013 GDP growth of 1.8% and then a better GDP expansion of 2.8% in 2014.
Industrial output will continue to lead overall economic performance next year, MAPI said, with manufacturing likely to grow at 3.6% for full-year 2014.
Referring to the 5% jump in industrial production in the first quarter, MAPI chief economist Daniel Meckstroth said, “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.”
He said MAPI expects that US construction of new homes, known as housing starts, should see a sharp 26% increase for 2013 as a whole, with auto manufacturing likely to advance by 8% for the year.
He said the continuing housing sector recovery likely would generate an additional 26% growth in housing starts for 2014.
Strong growth in both housing and automotive manufacturing is important for US chemicals producers because those two industries are key downstream consumers of a wide range of chemicals and plastic resins.
MAPI’s forecast of strong 26% improvements in US home construction for both 2013 and 2014 also would stimulate added growth for the overall US economy.
Traditionally, the housing industry has led every US post-recession recovery since the end of World War II in 1945.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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