Executive Briefings

Is U.S. Manufacturing Renaissance About to Run Its Course?

Manufacturing data tend to be a leading indicator for the rest of the economy. The recent weakness is more an indication of future conditions than present ones, meaning the U.S. manufacturing renaissance of the last two years may be about to take an extended breather.

An analysis of 27 major industries by the Manufacturers Alliance for Productivity & Innovation (MAPI) predicts that industrial activity in the U.S. is entering a period of sluggish growth that will last until the second half of 2014. MAPI chief economist Daniel Meckstroth expects that industrial production will grow by 4.5 percent in 2012 and only 2.3 percent in 2013, a full percentage point lower than his previous estimate of 3.3 percent. "The big difference right now is that the growth we've seen for the last two years, that's not going to occur much anymore," says Meckstroth.

What's frustrating is that industry is primed for a big investment boom. On the whole, manufacturers have high profits, relatively high utilization rates, and bunches of cash. They face ultra-low borrowing costs. Yet uncertainty abounds.

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Keywords: supply chain, industrial manufacturing in U.S., renaissance in U.S. manufacturing to end

An analysis of 27 major industries by the Manufacturers Alliance for Productivity & Innovation (MAPI) predicts that industrial activity in the U.S. is entering a period of sluggish growth that will last until the second half of 2014. MAPI chief economist Daniel Meckstroth expects that industrial production will grow by 4.5 percent in 2012 and only 2.3 percent in 2013, a full percentage point lower than his previous estimate of 3.3 percent. "The big difference right now is that the growth we've seen for the last two years, that's not going to occur much anymore," says Meckstroth.

What's frustrating is that industry is primed for a big investment boom. On the whole, manufacturers have high profits, relatively high utilization rates, and bunches of cash. They face ultra-low borrowing costs. Yet uncertainty abounds.

Read Full Article


Keywords: supply chain, industrial manufacturing in U.S., renaissance in U.S. manufacturing to end