U.S. industrial production advanced at an annual rate of 3.2 percent in the third quarter, and the manufacturing industry should continue to experience growth. According to MAPI, the manufacturing production is forecast to grow 3.4% in 2014, 4.0% in 2015, and 3.6% in 2016. MAPI expects all 23 manufacturing industries to grow in 2015, with housing leading at 29%, and then aerospace products and parts at 10%. High-tech industrial production will grow significantly faster than the rest of manufacturing.
Manufacturing growth is outpacing US Growth.
In the first half of 2014, inflation-adjusted GDP increased at a 0.9% annual rate, while manufacturing production grew at a 4% annual rate. Manufacturing is expected to grow faster than the overall economy in 2015 due to the shifted demand toward manufactured goods.
During economic downturns and times of economic uncertainty, consumers are less likely to spend money on durable goods. Durable goods are items that last more than three years such as cars, new machinery, appliances, etc. Consumers and companies usually wait until the goods they already have wear out, and/or economic confidence returns to buy these kinds of goods. With economic growth expected, as well as consumer confidence strengthening; production growth of manufacturing should continue to increase. Motor vehicles and housing starts (the number of new residential construction projects that have begun during a given time period) are usual indicators for future trends in manufacturing. MAPI expects auto sales to increase 3% in 2015, and housing starts should grow 10% by the end of 2014 and 29% in 2015, causing an increase in purchases of appliances and other house household goods.
MAPI Forecasts for 2015:
- Auto sales will increase 3% .
- The forecast for household appliance production is for 6% growth in 2015, and 4% in 2016.
- Pharmaceutical and medicine production should increase 2% in 2015, and 3% in 2016.
- Iron and steel production is forecast to increase 1% in 2014, 7% in 2015, and 4% in 2016.
- Alumina and aluminum production should be increasing 6% in both 2015 and 2016.
- Fabricated metals production should post moderate gains of 5% in 2015, followed by 4% in 2016.
- Basic chemicals production should increase 4% in 2015, and 2% in 2016.
- Paper production is predicted to increase 3% in 2015, and rise 2% in 2016.
- Mining and oil and gas field machinery production is predicted to increase 6% in 2015, and 7% in 2016.
- Industrial machinery production should grow 9% in 2015, and 5% in 2016.
- Communications equipment production will increase 8% in 2015 and 9% in 2016.
- Electrical equipment production is forecast to grow 6% in 2015, and 5% in 2016.
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