Manufacturing will see stronger recovery than the general economy, according to a new report by the Manufacturers Alliance/MAPI.
"A recovery is clearly under way. Monthly data for manufacturing production indicate that the recession, which started in January 2008, ended in June 2009," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "The worst of the inventory destocking is ending; inventories do not have to be built to increase production as output growth can result from less liquidation. The inventory swing has had a positive effect on production and was evident in the fourth quarter (2009)."
Manufacturing industrial production, measured on a quarter-to-quarter basis, grew at nearly a 6% annual rate in the fourth quarter of 2009 following 8% growth in the third quarter.
Production in non-high-tech manufacturing expanded at a 5% annual rate in the fourth quarter. According to MAPI's quarterly economic forecast, non-high-tech manufacturing production is expected to increase 3% in 2010 and grow by 5% in 2011. High-tech industrial production rose at an 8% annual rate in the fourth quarter. MAPI predicts it will post impressive 15% growth in 2010 and 18% growth in 2011.
There was a significant upward trend in the 2009 fourth quarter figures for the various components of the manufacturing economy. Steel production grew by 49% while basic chemicals advanced by 16%.
The largest drop came in construction machinery production which declined 27% while mining, oil field and gas field machinery experienced a 26% decline.
