A place to convene. A place to discuss. A place for ideas.

Manufacturing Outlook for 2013 is "Modest", says MAPI

By Ideas Lab Staff January 2, 2013

In its latest quarterly report the Manufacturers Alliance for Productivity and Innovation predicts a sluggish start for manufacturing in the new year.

A devastating hurricane to the east coast, continued worries over Europe’s financial stability, and the uncertainty in Washington DC have not contributed to an overwhelmingly positive end to 2012, the Alliance finds, anticipating a GDP growth of less than 1 percent annual rate in the last quarter of the year.

That makes the outlook for 2013 rather modest. “Although the pace should pick up in the second half of 2013 and during 2014, it will not be until the second half of 2014 that the economy grows at what could be called a moderate pace,” MAPI reports in its latest U.S. Industrial Outlook report.

With the pinch on consumers, spending isn’t expected to climb as much, and this affects business investment in equipment, the report says. Outside of aerospace and defense equipment, new orders for business investment were flat for the first ten months of 2012. Along with the other concerns named, businesses are waiting to see what new regulations will hit in this year and how it will affect them before spending again.

As for the economy, manufacturing is expected to grow faster than the rest of the industries, but not by much. MAPI forecasts manufacturing production “will increase 2 percent in 2013 and 3.2 percent in 2014, and then average 3.6 percent growth from 2015 to 2017″. The area most likely to experience increases includes high-tech production, although not really picking up until 2014, with non high-tech growing at a much slower rate.

Of all the industries, MAPI predicts growth in each except public works construction.

The American Society for Quality (ASQ) also reported supply concerns in its 2013 Manufacturing Outlook Survey, with a third of respondents expecting shortages in parts of services in the new year.

ASQ reports that respondents answers about the financial outlook for 2013 were “nearly identical” to those the year before; 70 percent upped revenue in 2012, and 65 percent expect the same growths in 2013.

“It’s encouraging to see such optimism in manufacturers about their outlook of revenues for 2013,” said ASQ CEO Paul Borawski is quoted as saying. “Manufacturing is a key driver of economies worldwide, and their health is important to businesses, communities and individuals that rely on them.”