Manufacturing Sector Sends Encouraging Signals for Supply Chain Managers

Stable consumer-driven spending and a strong forecast for business investment bode well for the manufacturing sector, according to the Manufacturers Alliance for Productivity and Innovation’s U.S. Industrial Outlook, a quarterly report that analyzes 27 major industries.

By ·

Stable consumer-driven spending and a strong forecast for business investment bode well for the manufacturing sector, according to the Manufacturers Alliance for Productivity and Innovation’s U.S. Industrial Outlook, a quarterly report that analyzes 27 major industries.

Manufacturing industrial production increased at a 2.1% annual rate during the first quarter of 2014 while inflation-adjusted GDP declined 1%. Manufacturing production grew faster than demand, thereby creating an inventory buildup that was quickly corrected in April.

Manufacturing production increased 2.6% in 2013. MAPI forecasts growth of 3.2% in 2014 and 4.0% in 2015, consistent with the March 2014 report.

“Consumer-driven manufacturing growth will be relatively stable, supported by employment gains and rising wages,” wrote MAPI chief economist Daniel J. Meckstroth, Ph.D. “Households have low debt burdens and their wealth is rising because of higher stock and home prices. Some growth themes that create an incentive for business investment are expanding energy infrastructure, revival of the housing industry supply chain, investment in manufacturing plants, and strong demand for transportation equipment. Firms are likely to invest thanks to the certainty of the two-year federal budget and the debt ceiling agreement as well as renewed growth in Europe and Japan.”

The report offers economic forecasts for 23 of the 27 industries. MAPI anticipates that 20 industries will show gains in 2014, two will remain flat, and just paper production will decline. Growth leaders include industrial machinery with a 12% increase and housing starts at 10%.

The outlook improves even more in 2015, with growth likely in all 23 industries, led by housing starts at 37% and electric lighting equipment at 12%.

According to the report, non-high-tech manufacturing production (which accounts for 95% of the total) is anticipated to increase 2.9% in 2014 and 3.7% in 2015. High-tech industrial production (computers and electronic products) is projected to expand by 6.6% in 2014 and 10.0% in 2015.

From February through April 2014, 20 of the 27 industries MAPI monitors had inflation-adjusted new orders or production at or above the level of one year prior (six more than reported last quarter), while four declined and three were flat.

Meckstroth reported that nine industries are in the accelerating growth (recovery) phase of the business cycle, 12 are in the decelerating growth (expansion) phase, four are in the accelerating decline (either early recession or mid-recession) phase, and two are in the decelerating decline (late recession or very mild recession) phase.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
Private Fleet vs. Dedicated: Which one is right for you?
Having the right fleet for your business can give you an advantage over the competition and lower transportation costs.
Download Today!
From the April 2017 Issue
While adoption rates have remained relatively flat, yard management systems (YMS) are helping logistics operations turn that important space between the loading dock and the gate into a vital link in the supply chain.
Information Management: Wearables come in for a refit
2017 Air Cargo Roundtable: Positive Outlook Driven by New Demand
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Maximize Your LTL Driver Adherence with Real-time Feedback
This webinar shows how companies are using real-time performance data to optimize the scheduling of their city fleets, as well as the routing of their standard, accelerated and time-critical shipments.
Register Today!
EDITORS' PICKS
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...

ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...