The Manufacturers Alliance for Productivity and Innovation (MAPI) Foundation released its quarterly forecast, U.S. Industrial Outlook: Glimmers of Light. The forecast shows positive signs of global economic stability. Low interest rates and the likelihood of fiscal policies to increase growth suggest the United States will not face a recession. However, the forecast is still indicating only modest to moderate U.S. economic performance and limited manufacturing output growth.
“While recent signs point to a modest firming of global growth, uncertainty remains a key issue for the outlook, largely driven by the potential for consequential new U.S. fiscal and trade policies,” noted Cliff Waldman, chief economist of the MAPI Foundation.
Among manufacturing industries, food, chemicals, and aerospace have a relatively strong growth outlook through 2020. Miscellaneous manufacturing, composed in part by medical equipment manufacturing, also has a relatively strong outlook. This industry is benefiting from an aging population and specialized products such as sports equipment.
Other findings include:
- The capital spending growth outlook is modestly stronger in the current forecast but still well below the historic norm, a difficult problem for the many equipment producers in the U.S. manufacturing sector.
- The dollar is likely to remain elevated for the next few years; this can affect price competitiveness and profitability in a challenging global business environment.
- Consumer spending is expected to be the main U.S. growth driver.
- U.S. GDP growth is likely to remain moderate, extending the post-2005 period in which U.S. economic growth has not exceeded 3%.
- Slow growth in the eurozone and China remains a concern, but fears of a larger crisis in either region are diminishing.
“An apparent modest firming of global growth is certainly a welcome change for the U.S. manufacturing outlook. Nonetheless, policy uncertainties and structural challenges are difficult forecast issues,” added Waldman.
The MAPI Foundation’s industrial outlook analyzes 27 major industries and is released quarterly.