While the first quarter of this year showed strong growth and the second quarter wasn’t as strong, the overall rate for 2013 should come in at 2.2%. according to the Manufacturers Alliance for Productivity and Innovation (MAPI).
Inflation-adjusted GDP increased at a 2.5% annual rate in the second quarter of 2013. Manufacturing declined at a 0.8% annual rate, a correction for the exceptionally strong pace of manufacturing production (5.2% annual rate) in the first quarter relative to meager growth in the overall economy.
MAPI forecasts that manufacturing production will increase 2.2% in 2013, a deceleration from the 3.1% forecast in June 2013.
A pickup is likely in 2014, with growth anticipated to be 3.2%; that forecast is down from 3.6% in the previous report.
Manufacturing production should outperform GDP growth, which MAPI estimates will be 1.6% in 2013 and 2.8% in 2014.
In its current report, MAPI makes an initial forecast for manufacturing production for 2015, predicting 4.1% growth.
“The outlook for 2014 and 2015 calls for close to a percentage point improvement in the growth rate each year,” said MAPI chief economist Daniel J. Meckstroth. “Consumer spending growth has remained remarkably stable because of surprisingly robust employment growth in the sluggish economy; the payroll tax increase is in the rearview mirror, and spending will accelerate in 2014; and households have low debt burdens and their wealth position is rising.
“In addition, businesses are well positioned for making new investments in structures and equipment,” Meckstroth added. “What is needed is more confidence about the future. With the Eurozone coming out of recession, export activity should pick up and provide a boost to business sentiment.”
Looking at specific industries the group predicts that both motor vehicles and parts production and household appliances are forecast to advance by 7%. Non-high-tech manufacturing production (which accounts for 95% of the total) is anticipated to increase 2.1% in 2013 and 3.1% in 2014. High-tech industrial production (computers and electronic products) is projected to expand by 5.2% in 2013 and 7.6% in 2014.
Material handling equipment grew 9% year-over-year through June 2013. The largest drop came in electronic computer shipments, which declined by 43% over the same time frame.