The U.S. manufacturing recession continued unabated, and in fact intensified in the third quarter, and is now part of a global downturn, according to the Manufacturers Alliance/MAPI Quarterly Industrial Outlook -- Third Quarter 2008.
"There was a sudden and acute acceleration of the decline in the industrial sector in September and October," said Daniel J. Meckstroth, Ph.D., Chief Economist for the Manufacturers Alliance/MAPI. "The vicious circle of financial crisis, decline in wealth, consumer spending cuts, and job loss continues to spiral into a severe recession -- certainly the worst since the early 1980s."
On an annual basis, MAPI forecasts a decline in the industrial sector this year and next before showing some marginal improvement in 2010. Manufacturing production is expected to fall 1.4% in 2008 and decline 4.2% in 2009, preceding 0.9% growth in 2010.
Manufacturing industrial production, measured on a quarter-to-quarter basis, declined at a 7.8% annual rate in third quarter 2008 after falling at a 4% annual rate in the second quarter.
"A recession among our trading partners has weakened the outlook for exports, which is one of the few remaining pillars providing positive support to the economy, particularly to the manufacturing sector," Meckstroth said
Non-high tech manufacturing production declined at a severe 8.2% annual rate in third quarter 2008. It is forecast to decline 2.9% for the year, fall further by 6.3% in 2009, and grow 0.9% in 2010.
There was some good news in that the communications equipment market saw double-digit, year-over-year growth in the third quarter as it grew by 16%.
Other segments did not do as well with industrial machinery falling 19%, motor vehicle and parts production decreasing by 16%, basic chemicals off 14%, and engines, turbines, and power transmission equipment down 11%.
MAPI is predicting that aerospace products and parts will grow 3% in 2009, while communications equipment and public construction should each grow by 1%.
Copyright Agence France-Presse, 2008