At times, it resembled a global game of "Can you top this?" Economist Chris Kuehl recites a string of "black swan events" in 2011 -- a tsunami and nuclear emergency in Japan, the Arab Spring that sent oil prices spiking, severe floods and tornadoes in the United States, not to mention the European Union awash in debt and on the brink of a meltdown. The United States saw its financial rating downgraded, but that did little to deter Congress and the Executive Branch from engaging in constant political brinkmanship. Yet despite all this, U.S. manufacturing continued to grow last year.

On Jan. 3, the Institute of Supply Management announced manufacturing expanded for the 29th-consecutive month. "Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012," says Bradley Holcomb, chair of ISM's Manufacturing Business Survey Committee.

Most economists expect continued growth in the U.S. economy and in manufacturing, but that growth is likely to be modest. The Manufacturers Alliance for Productivity and Innovation (MAPI) expects manufacturing production to increase 3% in 2012, outstripping U.S. GDP growth which MAPI predicts will be 2.1%. MAPI Chief Economist Daniel Meckstroth says, "Pent-up demand for postponed consumer durable goods continues to exist, particularly in motor vehicles. In addition, firms are profitable and have the need to spend more for both traditional and high-tech business equipment, and reasonably strong growth in emerging economies is still driving U.S. exports."

Barry Misthal, the global leader for PwC's Industrial Manufacturing Practice, also predicts slower growth for the U.S. economy. "My anticipation is we will see a continued slowdown in demand "both in the U.S. and globally, with a few bright spots," he says. "The bright spots are U.S. companies that are aligned to the energy sector, whether it is oil, gas, natural gas or shale gas extraction. U.S. manufacturers that have good exposure to the energy sector will still have very solid demand going into 2012."

Kuehl, who serves as economic analyst for the Fabricators & Manufacturers Association International, says attendees surveyed at the Fabtech show last November were clearly in the mood to buy new machinery. He says some company executives were saying they needed to replace old machines that were wearing out while others need new machines in order to enter new markets.

"But a lot of the responses were, 'I can't wait any longer for people to solve my problems. I have a business to run and I need to get on with it, so I am going to take a more risk-tolerant approach to the coming year,'" says Kuehl.