Manufacturing’s slowing, solid growth continues

05/18/2006


Growth in the U.S. economy is expected to decelerate in the next two years, but the manufacturing sector should continue its solid climb through 2006 before experiencing some retrenchment in 2007, according to a new report.

The Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts inflation-adjusted gross domestic product (GDP) growth will be 3.3% in 2006 and 2.7% in 2007, nearly consistent with the February 2006 projections of 3.2% and 2.8%, respectively. Overall U.S. GDP growth in 2005 was 3.5%.

“Factors that would lower the forecast, such as higher than expected energy prices and long- term interest rates, have been offset by stronger international growth and a lower than expected value of the dollar,” said Daniel J. Meckstroth, Manufacturers Alliance/MAPI chief economist.

Growth in manufacturing activity will likely outpace the general economy in 2006 but trail it in 2007. The Alliance expects manufacturing industrial production to increase a robust 4.6% in 2006, before returning to a more modest 2.5% increase in 2007. Manufacturing activity increased 3.9% in 2005. Inflation-adjusted spending for computers and electronic products is forecast to rise 17.1% in 2006 and 12.0% in 2007. Production in non-high-tech industries will grow 3.5% this year and 1.4% in 2007.

“Manufacturing is benefiting from faster economic growth abroad and continued moderately strong domestic demand,” Meckstroth said. “The stronger international activity, coupled with a slightly lower dollar, helps increase exports and tightens up product availability. Manufacturing capacity utilization is rising, vendor deliveries are slower, and commodity prices continue to skyrocket.”

Real investment in equipment and software should increase 10.1% in 2006 and 5.5% in 2007, growing several times faster than the general economy. The largest gains in spending will come in the high-tech sectors. Inflation-adjusted expenditures for information processing equipment are expected to rise 11.5% in 2006 and 9.7% in 2007. Spending for transportation equipment, however, will be volatile over the next two years, with Alliance predictions of 11.7% growth in 2006, but a decrease of 1.9% in 2007. The forecast calls for industrial equipment spending to increase 7.7% and 3.2%, respectively. Spending on non-residential structures is forecast to rise 7.0% this year and 7.5% in 2007.





No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Safer human-robot collaboration; 2017 Maintenance Survey; Digital Training; Converting your lighting system
IIoT grows up; Six ways to lower IIoT costs; Six mobile safety strategies; 2017 Salary Survey
2016 Top Plant; 2016 Best Practices on manufacturing progress, efficiency, safety
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Future of oil and gas projects; Reservoir models; The importance of SCADA to oil and gas
Big Data and bigger solutions; Tablet technologies; SCADA developments
Automation modernization; Predictive analytics enable open connectivity; System integration success; Automation turns home brewer into brew house
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems
Natural gas for tomorrow's fleets; Colleges and universities moving to CHP; Power and steam and frozen foods

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Motion control advances and solutions can help with machine control, automated control on assembly lines, integration of robotics and automation, and machine safety.
Compressed air plays a vital role in most manufacturing plants, and availability of compressed air is crucial to a wide variety of operations.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
click me