The MHEDA Journal - First Quarter, 2016 - (Page 72)

INDUSTRY MAPI FORECAST MAPI Economic Forecast: Growth but No "Break Out" Boom BY THE MAPI FOUNDATION. REPRINTED WITH PERMISSION FROM MAPI A number of factors have challenged economic growth in 2015, among them a second straight severe winter, the West Coast port strike, a strong dollar and collapse of oil prices, but assuming the first two were anomalies, there should be marginal improvement for 2016 according to a new forecast. The MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation, released its quarterly economic forecast, predicting that inflation-adjusted gross domestic product will expand 2.3% in 2015, down from 2.4% in the May 2015 report, and increase to 2.9% in 2016, a slight decline from 3.0% in the previous forecast. GDP growth for 2017 is anticipated to be 2.7% representing no change from the May forecast. Manufacturing production is expected to decelerate, with growth of 2.1% in 2015 (a decline from 2.5% in the previous forecast) before rising to 3.4% in 2016, but below the 4.0% predicted in the May report. The forecast of 3.1% growth in 2017 remains unchanged. "The growth rate is not accelerating," said MAPI Foundation Chief Economist Daniel J. Meckstroth, Ph.D. "The economy has fully recovered, but it has been an abnormally 72 MHEDA | themhedajournal.org slow expansion after a sluggish recovery. Consumers and businesses are risk averse, and without the credit hype, spending will have to be commensurate with income growth." Still, Meckstroth sees some positive signs. "The good news is that despite slow economic growth, consumer and investment driven manufacturing is still growing," he added. "Firms are not making big investments to increase productivity; they are instead hiring more workers to keep up with demand. The household sector has enjoyed the job growth which in turn creates confidence The good news is that despite slow economic growth, consumer and investment driven manufacturing is still growing and willingness to spend. Job growth, low unemployment, low inflation, and interest rates are the reasons that spending for housing and autos leads the growth in manufactured goods." Production in non-high-tech manufacturing is expected to increase 2.3% in 2015, 3.3% in 2016, and 2.9% in 2017.High-tech manufacturing production, which accounts for approximately 5% of all manufacturing, is anticipated to grow 1.5% in 2015, 6.1% in 2016, and 5.9% in 2017. The forecast for inflation-adjusted investment in equipment is for growth of 3.1% in 2015, 7.9% in 2016, and 5.9% in 2017. Capital equipment spending in high-tech sectors will also rise. Inflation-adjusted expenditures for  information processing equipment  are anticipated to increase by 1.7% in 2015 before improving to 10.2% in 2016, and 9.6% in 2017. The MAPI Foundation expects  industrial equipment  expenditures to advance 6.1% in 2015, 13.0% in 2016, and 8.5% in 2017. Spending on transportation equipment is forecast to increase 6.8% in 2015 and 1.2% in 2016 but decline by 1.1% in 2017. Spending on nonresidential structures  is anticipated to decrease by 0.9% in 2015 before rebounding to growth of 5.5% in 2016 and 5.4% in 2017. Residential fixed investment is forecast to increase 8.3% in 2015, 9.5% in 2016, and 8.2% in 2017. Meckstroth http://www.themhedajournal.org

Table of Contents for the Digital Edition of The MHEDA Journal - First Quarter, 2016

Chairman's Perspective
From the Desk of Liz Richards
Editor's Note
MHEDA’S 2016 BOARD OF DIRECTORS AND MBOA
Ask Your Board
MHEDA University Calendar
MHEDA MEMBER PROFILE
@ WORK
WOMEN AT WORK
DISTRIBUTORS FORECAST
SUPPLIER FORECAST
MHI FORECAST
ITA FORECAST
CEMA FORECAST
MAPI FORECAST
A POSITIVE 2016 IN STORE FOR MATERIAL HANDLING
New Members
Spotlight on Association News
MHEDA Milestones
Index of Advertisers by Product Category
The Last Word

The MHEDA Journal - First Quarter, 2016

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