Manufacturing Production Will Outpace GDP in 2006, Match It In 2007
At 5%, this year's growth in U.S. manufacturing production will "significantly" exceed projected inflation-adjusted GDP growth of 3.3%, predicts Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group.
In 2007, the alliance expects the growth in manufacturing production to match GDP growth of 2.5%.
"The hurricanes and commodity-supply disruptions in 2005 set off a scramble for manufacturing inventory in 2006," explains Daniel J. Meckstroth, the alliance's chief economist. "The manufacturing sector has also benefited from its higher concentration in capital goods industries and electronics, which have outperformed other sectors of the economy this year."
Adjusted for inflation, outlays for equipment and software should increase 8% this year and 6.1% in 2007, with the largest percentage gains coming in the economy's high-tech sectors, says the alliance. For example, expenditures for information processing equipment are expected to increase 9.2% this year and 8.4% in 2007.
The alliance released its most recent economic forecast on August 17.