While the outlook for the overall U.S. economy has weakened, the manufacturing sector continues to forge ahead, according to the Manufacturers Alliance/MAPI.
"The positive momentum of a 2% reduction in payroll taxes this year and 100% expensing of equipment and software investments has been more than offset by higher oil prices, and Japanese automakers in the U.S. faced a parts shortage as a result of the tsunami, said Daniel Meckstroth, Ph.D., chief economist for the Manufacturers Alliance/MAPI.
"Manufacturing, though, is currently well positioned for growth. There is pent-up demand for consumer durables, firms are profitable and need to spend more for both traditional and high-tech business equipment, and strong growth in emerging economies is driving U.S. exports," Meckstroth, added.
The group's report found that manufacturing industrial production, measured on a quarter-to-quarter basis, grew at a 7% annual rate in the first quarter of 2011, after expanding at a 3.4% annual rate in the fourth quarter of 2010.
MAPI forecasts that manufacturing production will increase 6% in 2011 and advance by 4% in 2012.
Production in non-high-tech manufacturing expanded at a 5.7 % annual rate during the first quarter of 2011. Non-high-tech manufacturing production (which accounts for 90% of the total) is expected to increase 5% in 2011 and 4% in 2012.
High-tech industrial production rose at a 21% annual rate in the first quarter of 2011. MAPI anticipates this sector will post strong 15% growth in 2011 and 13% growth in 2012.
Industrial machinery grew by 32% in the three months ending April 2011 compared with the same period one year earlier, while mining and oil and gas field machinery production improved by 29% in the same time frame.
The report forecasts that mining and oil and gas field machinery, and industrial machinery, will grow 26% in 2011. Electric lighting equipment will remain flat.