ARLINGTON, Va. -- According to a Manufacturers Alliance/MAPI report, manufacturing could fare better than the U.S. economy due to continuing strength in exports.
The report forecasts GDP growth will slow to 1.3 percent in 2008 before improving to 1.9 percent in 2009.
“The 2008 recession looks like it is going to be milder and more prolonged rather than normal,” said Daniel J. Meckstroth, Manufacturers Alliance/MAPI Chief Economist. “The large, but temporary, tax rebates and massive monetary policy easing will interrupt an economic downturn in the second and third quarters of this year but will unwind in late 2008 and early 2009. The outlook is for a prolonged period of subpar growth rather than a concentrated adjustment.”
Manufacturing production growth will slow from an already low 1.7 percent growth in 2007 to an estimated 0.4 percent in 2008, preceding a decent upswing to 3.1 percent in 2009. Production in non-high-tech industries is expected to decline 1.2 percent this year and grow by 1.6 percent in 2009.
High-tech industrial production is anticipated to rise 16.9 percent in 2008 and 14.8 percent in 2009.
Spending on non-residential structures is expected to fall over the next two years. After spending in this area increased by 12.9 percent in 2007, it should rise by just 2.6 percent in 2008 and decline by 7.4 percent in 2009.
Export growth should outpace imports by a wide margin by the end of 2009. Inflation-adjusted exports are expected to rise 8.3 percent in 2008 and 9.7 percent in 2009. Imports are expected to remain flat this year and increase by 1.6 percent next year.
“The significant decline in the value of the dollar is important because it allows U.S. manufacturers to tap into the economic strength of the rest of the world to cushion our downturn,” Meckstroth added, “and makes it more expensive for foreign firms to be competitive from an overseas location.”
For more information, visit http://www.mapi.net.