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MAPI Expects Turnaround By Late 2009

U.S. recession has intensified, but thanks to lower commodity prices, declining imports, and a federal fiscal stimulus, manufacturing may be poised for a moderate rebound.

ARLINGTON, Va. -- The U.S. recession has intensified over the past three months, but a harsh 2009 may give way to a moderate rebound in 2010, according to the Manufacturers Alliance/MAPI.

"It is clear that a global recession is in progress," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "A severe recession among our global partners has caused exports to decline, thereby removing a previously positive support to the economy, particularly to the manufacturing sector."

“Fortunately, we see an eventual end to the current recession, perhaps by late 2009,” he added.  “A second round of federal fiscal stimulus, this time of major proportions; growing pent-up demand as spending is postponed; lower commodity prices, particularly oil; lower mortgage and borrowing rates resulting from Federal Reserve monetary stimulus; and declining imports will all contribute to a rebound in industrial production activity in late 2009.”

MAPI expects manufacturing production to fall 9 percent in 2009 before growing 3 percent in 2010.

After falling 15 percent in 2008, non-high-tech manufacturing production is expected to fall 8 percent this year and rebound 2 percent in 2010. High-tech industrial production is expected to fall 10 percent in 2009 and grow 6 percent in 2010.

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