Manufacturing Maintains Growth in Second Quarter

Aerospace, mining and il and gas field machinery continue fast pace

Manufacturing industrial production expanded at a 3.9% annual rate in second quarter 2007, far better than the weak 0.8% in the first quarter, according to the ManufacturersAlliance/MAPI Quarterly Industrial Outlook that was released on Sept. 6.

For the year as a whole, though, the report predicts that manufacturing production growth will decelerate from the 4.7% recorded in 2006 to 2% growth in 2007,before rebounding to 2.9% growth in 2008.

"An improvement in manufacturers' exports in most industries and the end of an inventory drawdown explains the bounce back in second quarter industrial activity,"said Daniel J. Meckstroth, Ph.D., Manufacturers Alliance/MAPI chief economist. "Unfortunately, the manufacturing sector cannot completely shake off the depressing effect of the housing collapse andthe downward drifting motor vehicles market. Furthermore, we no longer look to strong business investment to lead economic growth."

Six industries enjoyed strong double-digit year-over-year growth in the second quarter, including electricalequipment, and mining and oil and gas field equipment, each at 13%; and aerospace products and parts; communications equipment; industrial machinery; and private non-residential construction all grew by 12%.

The MAPI forecast series predicts two industries will achieve double-digit growth in both 2007 and 2008 -- mining and oil and gas field machinery, 12% in 2007 and 11% in 2008; and aerospace products and parts, with expected growth of 11% in each year.

MAPI envisions two other industries to see double-digit growth in at least one of these years. Communications equipment should continue its strong showing in 2007, with anticipated growth of 14%, followed by an 8% advance in 2008.Electrical equipment is anticipated to grow by 12% this year but decline by 1% in 2008.

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