The U.S. economy, as measured by U.S. industrial production, is expanding. The annual growth rate of 4.1% is on target with the forecast we presented in March 2011. IndustryWeek readers should be moving forward with confidence that more opportunities await us in the latter half of 2012 and in 2013. The forecast calls for the economy to continue to expand at about this pace through the first quarter of 2013. A noticeably slower rate of rise will characterize the remainder of 2013.
We should not gloss over the fact that the industrial side of the economy is improving, as evidenced by a rising trend in the year-over-year comparisons shown on the chart below. The June U.S. industrial-production quarterly and annual comparisons will experience a mild upward bias into 2013. Readers tied to the industrial side of the economy will be busy through the rest of the year.
U.S. Industrial Production Index on the Rise
|Year-over-year comparisons show industrial production rising into 2013.|
Some of the news of late has been less than bullish. The Purchasing Managers Index fell to 49.7 in June, the first decline below 50 since July 2009, signaling a potential future contraction in the manufacturing sector. Remember that changes in the PMI do not reflect an immediate change in the speed or direction of the U.S. economy. Viewing the PMI as a leading indicator provides an external indication that we are on track with our outlook for the rest of this year and with our forecast of noticeably slower growth in the U.S. economy in the latter half of 2013.