5% Manufacturing Production Growth Forecast For 2006; 2.5% For 2007

U.S. manufacturing production will advance a modest 5% this year and then slow markedly to 2.5% growth in 2007, suggests the most recent detailed quarterly economic forecast from Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group.

Communications equipment promises to be the standout sector this year, with production expected to rise 27% from 2005. The demands of national defense, the Internet, cellular communications, high-definition television broadcasting and HD radio, will drive growth in 2006, according to the alliance. Aerospace products and parts also are likely to have a very good 2006, with production increasing 17%. Production of electronic instruments is forecast to increase 15%, and production of construction machinery is expected to rise 14%.

In contrast, the alliance is forecasting production declines this year for pharmaceuticals (down 1%), alumina and aluminum (down 1%), and HVAC equipment (down 6%).

No production growth in 2006 is forecast for paper, and motor vehicles and parts.

For 2007, production of mining and oil and gas field machinery is forecast to rise 17%, making it -- at this point -- the leader. Communications equipment production is expected to rise 9%, and production of electronics instruments is expected to increase 8%.

In contrast, appliances (down 2%), steel (down 2%), motor vehicles and parts (down 5%), and engine, turbines and power equipment (down 2%) are expected to post production declines in 2007.

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