Manufacturing growth strong, but slowing
The manufacturing expansion should continue, but decelerate, through 2007, according to the Manufacturers Alliance/MAPI Quarterly Industrial Outlook, a report that analyzes 27 major industries.
The Alliance expects some deceleration in manufacturing industrial production, retrenching somewhat from 4.8% growth in 2004 and an anticipated 3.4% in 2005.
“A high level of energy and commodity prices increases costs in the industrial sector and hurts U.S. competitiveness.%% ability to tap their home equity and continue driving growth in big-ticket consumer items like houses and motor vehicles. Most industries—consumer, equipment, materials and construction—will experience slower growth but the weight of these factors are not enough to slow growth, only the pace of growth.”
“Energy, medical, and high-tech industries are leading growth this year,” Meckstroth added. “The capital equipment markets are generally strong but decelerating.”
The report also offers economic forecasts for 24 of the 27 industries for 2006 and 2007, and a longer term forecast through 2010 for these same industries.
Two industries are expected to enjoy double-digit growth in 2006 — mining and oil and gas field machinery should rise 49% with a profit incentive to expand due in part to the high levels of petroleum and metal prices and computer equipment by 13%. Similar growth in both industries is expected for 2007.