ARLINGTON, Va. - Manufacturing growth and the overall U.S. Gross Domestic Product (GDP) are expected to slow in 2007 before seeing a stronger 2008, according to a report by the Manufacturers Alliance/MAPI.
The Manufacturers Alliance/MAPI Quarterly Economic Forecast expects GDP growth to slow to 2.3 percent in 2007 from 3.3 percent in 2006, and then rebound to 3 percent in 2008.
“The deceleration in economic growth is primarily a consequence of the continued housing slump, soft business investment, a surprise downshift in exports, and inventory adjustment,” said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. “There are already signs of a rebound in business activity. The American consumer is resilient, the inventory correction has run its course, and fundamentals remain strong for export growth. We expect growth to pick up the pace in the second half of 2007.”
Manufacturing growth is expected to slow to 2.1 percent in 2007 from 4.7 percent in 2006. For 2008, it should see a significant turnaround to 3.3 percent.
Spending for computers and electronic products is expected to rise 13.6 percent in 2007 and 13 percent in 2008. Production in non-high-tech industries should see a 0.8 percent increase in 2007 and a 2.3 percent rise in 2008.
Expenditures for information processing equipment will see a 7.1 percent rise in 2007 and 6.9 percent in 2008. Investment in equipment and software will slow to a 2 percent growth rate in 2007, followed by a 5 percent rise in 2008.
Industrial equipment expenditures are expected to rise 1.1 percent in 2007 and decrease 2.3 percent in 2008. Transportation equipment spending should drop 6.7 percent in 2007 before growing by 8.2 percent next year.
Exports will outpace imports, as exports will increase 6.4 percent and 9.4 percent in 2007 and 2008, respectively. Imports should increase 2.5 percent this year and 5.3 percent in 2008.
Unemployment is forecast to remain low at 4.6 percent in 2007 and 4.7 percent in 2008.
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