Growth in manufacturing sector likely to continue
Issue:Winter 2015 : Nuts & Bolts
The U.S. manufacturing sector is entering what is shaping up to be a sustained growth period, according to the MAPI Foundation. Manufacturing production increased by 4 percent during the first half of 2014,and by 5 percent for the three months ending in July. Meanwhile, U.S. Gross Domestic Product (GDP) grew by only 0.9 percent.
For the year, MAPI is predicting that manufacturing production will be up by 3.4 percent. Next year it is forecast to increase by 4 percent, followed by 3.6 percent growth in 2016.
“Manufacturing will continue to grow faster than the overall economy,” according to MAPI Foundation chief economist Daniel Meckstroth.
The reason: “Demand has shifted toward manufactured goods. Durable goods, equipment and construction have long lives and therefore are temporarily postponable, especially during economic downturns and times of uncertainty.” That uncertainty is lifting a little bit, Meckstroth said. Consumers are buying big-ticket items like cars; they are getting jobs and increasing their net wealth; their debt burden has dropped; and interest rates remain low.
MAPI says that 19 of the 23 industries it follows will grow in 2014, with three remaining flat and one -- paper production -- projected to decline. “Growth leaders include construction machinery with 11 percent annual growth and housing starts with 10 percent.”
In 2015, all 23 industries are expected to grow, with housing starts leading the surge with a growth rate of 29 percent and aerospace products and parts at 10 percent.
Articles in THE LINE are reprinted with permission from
Manufacturers & Technology News.