Manufacturing Recovery Slow But Steady
The global economy took a hard hit when the recession took hold in late 2008, early 2009. The manufacturing sector was not left unscathed as a number of buying customers either felt the crunch of the recession themselves, or simply tightened their belts to maintain cash flow. Regardless, the economic recovery did take hold this past year and is now slowing.
The good news, however, is that the modest growth currently taking place in the industry is viewed as sustainable, according to information from the Manufacturers Alliance/MAPI U.S. Industrial Outlook. The Alliance is able to generate unique macroeconomic and industry forecasts by providing major assumptions for the economy and conducting simulations with the HIS Global Insight Macroeconomic Model.
Alliance Chief Economic, Daniel J. Meckstroth noted that while there has been a deceleration in the pace of growth within the manufacturing sector, the overall recovery appears to be stronger in the manufacturing space as compared with the general economic recovery. In addition, the pace of consumer spending is improving, while the prolonged recession helped to create a pent-up demand for certain durable goods.
Measured on a quarterly basis, manufacturing industrial production was found to have grown at a 3 percent annual rate in the three month period that ended with October 2010. This sector of the market had enjoyed an 8 percent annual rate in the three month period that ended July 2010. This rate of manufacturing production is expected to increase 4 percent in 2011, followed by 5 percent in 2012.
The biggest manufacturing growth is expected to be seen in the high tech space as MAPI anticipates a strong 12 percent in 2011 – up from 4 percent in 2010 – and 15 percent growth in 2012.
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